Shares of Nokia soared over 20 percent in premarket trading today on revised fourth quarter guidance that estimates the company's mobile devices business has exceeded expectations and achieved underlying profitability.
According to a press release, Nokia's Devices and Services unit delivered better than expected results for the fourth quarter. The company also said operating expenses for the division were lower than expected, while non-IFRS operating margins for devices & services is now expected to be between break even and positive 2 percent.
Previous guidance for operating margins was between -2 percent and -10 percent. Actual numbers for the quarter were helped along by a $65 million patent payment from RIM.
Specifically, Nokia estimates that its Devices & Services net sales in the fourth quarter 2012 were approximately $5.1 billion, with total device volumes of 86.3 million units. Broken out, Nokia said it sold 15.9 million smartphones composed of 9.3 million Asha full touch smartphones, 4.4 million Lumia smartphones and 2.2 million Symbian smartphones.
While Nokia's Devices and Services division will actually beat expectations, the numbers actually constitute a drop in net sales and shipments annually. In the fourth quarter of 2011, Nokia saw $7.9 billion in total mobile device net sale, while total device shipments were 113.5 million.
In a statement, Nokia CEO Stephen Elop called the fourth quarter a "solid" one for Nokia, saying the company is "focused on priorities."
Nokia also estimates that Nokia Siemens Networks has exceeded expectations for the fourth quarter 2012, delivering record underlying profits and a third consecutive quarter of underlying profitability. The company said NSN delivered strong performance in higher margin product categories and geographic regions, and better than expected cost management.
Nokia expects NSN non-IFRS operating margin for the fourth quarter 2012 to be between 13 and 15 percent.
And while a strong quarter is certainly a milestone for struggling Nokia, the company still projected a tough first quarter of 2013. The company expects non-IFRS Devices & Services operating margin in the first quarter 2013 to be approximately negative 2 percent, plus or minus four percentage points.
Shares of Nokia had settled some by early morning. As of 10:14 a.m. ET, Nokia stock was 16 percent to $4.35.
Nokia is scheduled to officially report fourth quarter and full year 2012 results on January 24, 2013.
Shares of Nokia soared over 20 percent in premarket trading today on revised fourth quarter guidance that estimates the company's mobile devices business has exceeded expectations and achieved underlying profitability. According to a press release, Nokia's Devices...