With just a few weeks left with a devices and services business of its own, Nokia has released its latest quarterly results, revealing how Microsoft's soon-to-be handset business is doing, and how Nokia will fare once the business changes hands.
For the fourth quarter, the company recorded revenue of €3.5bn, down 21 percent year on year but up 18 percent quarter on quarter. It was a similar story for operating profit: at €408m, it was down 39 percent year on year but up 19 percent quarter on quarter.
For the year as a whole, sales were €12.7bn, a drop of 17 percent. Operating profit was healthier at €1.4bn, and up by around a quarter.
The figures don't include the money brought in by Nokia's devices and services business, which Microsoft agreed to buy in a €5.4bn deal announced in September. The deal is expected to close later this quarter, pending approval from a number of local regulators. Once Microsoft and Nokia have finished dividing up their record collection, Nokia will be composed of three businesses: networking unit NSN, its Here mapping division, and a research-focused business Advanced Technologies.
The fourth quarter revenue for NSN, the largest of the three businesses, was €3.1bn, a fall of 22 percent year on year but a 20 percent quarter on quarter rise. Operating profit for the quarter was €349m.
Here managed €254m in revenue, delivering a small profit of €18m, while Advanced Technologies brought in profit of €65m on sales of €124m. (In preparation for the sale of its handset business, Nokia released a new reporting structure, showing what the bottom line would have looked for each of the three units had they always existed as discrete businesses.)
"The decline in Nokia's continuing operations net sales in 2013 was primarily due to lower NSN and Here net sales. The decline in NSN net sales was partially due to divestments of businesses not consistent with its strategic focus, as well as the exiting of certain customer contracts and countries. Excluding these two factors, NSN net sales in 2013 declined by approximately 13 percent primarily due to reduced wireless infrastructure deployment activity, which affected both Global Services and Mobile Broadband. The decline in Here net sales was primarily due to a decline in internal HERE net sales due to lower recognition of deferred revenue related to our smartphone sales, partially offset by an increase in external Here net sales due to higher sales to vehicle customers. Additionally, NSN and Here net sales were negatively affected by foreign currency fluctuations," Nokia said.
Nokia's soon to be sold software business figured purely as 'discontinued operations' in the company's fourth quarter results. Net sales for devices and services unit for the whole of 2013 came in at €10.7bn, down 29 percent year on year, while for the fourth quarter, the unit delivered €2.6bn of sales — a five percent year on year fall — and an operating loss of €198m.
Nokia attributed the decline mainly to falling sales of its 'mobile devices' — the term the company users for its lower-end devices including the Asha range — citing "lower volumes and ASPs, affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio".
Lumia volumes were also down, hampered by completion and Nokia's transition from the Symbian OS to Microsoft's Windows Phone — bad news for new owner Microsoft. According to reports, the company sold 8.2 million Lumias in the quarter, almost double the amount it sold a year ago, but down on the 8.8 million it managed a quarter ago — a particularly unimpressive figure given the quarter covered the holiday period, typically a bumper time for device sales.
Nokia didn't break out sales figures for the fourth quarter for its non-smartphones.