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More on Nokia Q4: NSN sales drop 22%

  • Q4 NSN sales -22% to €3.1B ($4.2B), dragged down by asset sales. Adjusted operating profit fell to €349M from €576M a year earlier.
  • Expects NSN operating margins of 1-9% in Q1 vs forecast of 7.6% by Nordea analyst Sami Sarkamies and 11.2% in Q4. FY profit margin will be "toward the higher end" of a 5-10% profit range.
  • Ends the quarter with €9B in gross cash.
  • Sales at the devices business, which is being sold to Microsoft (MSFT), are €2.63B ($3.56B), -29% on year and -4.5% on quarter. "Strong momentum of competing smartphone platforms" and a difficult transition to Lumia from Symbian phones contributed to falling smartphone sales.
  • Nokia (NOK) shares -2.3%. (PR)
  • Previous
Comments (23)
  • Tales From The Future
    , contributor
    Comments (5018) | Send Message
     
    NOK will be glad it could unload the phone division to MSFT.

     

    Now for the main questtion: What will they do with the new cash from MSFT going forward?
    23 Jan, 07:57 AM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    tftf

     

    "Now for the main questtion: What will they do with the new cash from MSFT going forward?"

     

    Timo will probably announce they have given it a lot of thought, whether to reinvest in NSN, Advanced Technology, or HERE, and have decided the money would probably be better spent giving it to charity. I can here it now:

     

    Timo
    Thanks for your question. Well, I really can't give you anymore color on the MS deal until after a year--after a year after the after deal closes with Microsoft, after the date for a year is over. I mean that the market we're in is very hard. It will be hard for us, so we've decided, I've decided to give the MS money to charity, where, you know, sort of it will be a better bet to get used nicely.

     

    Ravi

     

    What? Timo, thanks for that, but I believe NSN is in a great place and Advanced Technology Department has shown an excellent RoE and OM. What I think Timo means is that giving the money to Charity would be a nearly 100% good use of the money, and using it to increase our IP would be nearly the same, given our recent past success with NSN and AT.

     

    Timo
    Thanks Ravi. No, what I meant is that since I really have no clue, it would be better spent on charity right here in Finland. And the next time you say anything positive about our stinking carcass Nokia, I'll fire you, understand--is that clear enough for everyone?

     

    Ravi

     

    [To an aid under his breath, but loud enough to be heard], "I said lace his coffee with Adderall, not LSD you idiots!"
    25 Jan, 08:24 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1971) | Send Message
     
    NSN YoY sales drop was as expected and already baked in the SP. QoQ growth showing nice seasonal strength. Further thoughts and discussion here:
    http://seekingalpha.co...
    23 Jan, 08:00 AM Reply Like
  • caligrowthresearch
    , contributor
    Comments (125) | Send Message
     
    If they hadn't sold the device business to $MSFT shares would be at $4 max. Visited Paris the last days and didn't see one single Lumia! Only iPhones, Androids and yeah even Blackberrys. I rate both $MSFT and $NOK a strong sell for now.
    23 Jan, 08:13 AM Reply Like
  • mitrado
    , contributor
    Comments (2003) | Send Message
     
    Windows Phone is going down, I'm afraid. With Nokia leading it had a great chance to succeed. Without Nokia, Microsoft can start preparing its funeral. Sad but true...
    23 Jan, 10:43 AM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    Cali

     

    My sentiments too. Dead and stinking money.
    23 Jan, 07:16 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    If Windows phone goes down, MS goes down, and MS is not going down.
    25 Jan, 08:26 PM Reply Like
  • mitrado
    , contributor
    Comments (2003) | Send Message
     
    Don't even think that way. If Windows Phone goes down, Microsoft will survive. After all, they are posting record profits and Windows Phone barely affects their results.
    27 Jan, 04:37 AM Reply Like
  • Leont68
    , contributor
    Comments (1365) | Send Message
     
    Wish new Nokia all the best.
    23 Jan, 09:08 AM Reply Like
  • vk007
    , contributor
    Comments (46) | Send Message
     
    Wondering why NOK
    - is not announcing the name of new CEO
    - is not revealing the dividend
    - is not telling much about the new strategy
    - made a very soft patent deal with Samsung
    - has a hand break on with the patent litigations

     

    OK, D&S deal with MSFT is not closed yet, but still.

     

    Is NokiaSamsungNetworks (NSN) too far fetched? Meaning that Samsung takes over NOK before summer?
    23 Jan, 09:42 AM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1971) | Send Message
     
    Wondering why NOK
    - is not announcing the name of new CEO
    - is not revealing the dividend
    - is not telling much about the new strategy

     

    * all these three are tied together and will be discussed once the D&S deal has closed. The CEO chose is closely tied to the strategic direction Nokia Group will take

     

    - made a very soft patent deal with Samsung

     

    * The soft deal is very likely for SEP patents, where Nokia has to license the patents no matter what. So Nokia is playing smart by not playing hard ball (ticking off the regulators etc).
    * It is the non-SEP patents, where Nokia can ask whatever they like. Once the HTC royalty deal is in place, Samsung is in much tougher position and we might get a very nice deal...see my earlier comments above for some questimates...

     

    - has a hand break on with the patent litigations

     

    * Nokia is pursuing weak HTC (an Android manufacturer) on all fronts. Once HTC acquiesces, the real trophy, Samsung will have much more difficulty defending against Nokia.
    * But I agree, it has been a frustratingly slow process. Patent litigation always is.

     

    I do not see Samsung buying Nokia ever. Unless it is completely hostile bid, and Nokia has some poison pill in place....
    23 Jan, 10:44 AM Reply Like
  • vk007
    , contributor
    Comments (46) | Send Message
     
    "I do not see Samsung buying Nokia ever."

     

    Seppo, please explain why not?
    23 Jan, 01:21 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1971) | Send Message
     
    Let me clarify, I mean I do not think Nokia ever (ever being the next few years at least) wants to sell NSN to Samsung. And if Samsung does a hostile bid, Nokia has a poison pill in place. Also, with Nokia's current market cap, buying Nokia would be quite a chunk, even for Samsung.
    23 Jan, 01:35 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    Seppo,

     

    With all of my negativity about today's announcement, I agree with your assessment. Still, Timo looked like a deer standing in the middle of the road high on LSD caught in the headlights of a tractor rig. Very sad.

     

    Every time Rajeev Suri tried to make an positive comments, Timo undercut him by what sounded like: "No, man, we have no idea really."
    23 Jan, 07:20 PM Reply Like
  • beyond dreams
    , contributor
    Comments (191) | Send Message
     
    VK,
    The questions you pose is the reason I am going to be selling half of my position. I expected management to be much more forthcoming but all I see is a closed box to ensure management flexibility in the future.

     

    Still think NOK is a good investment, especially since the stock has plummeted to this level.
    23 Jan, 10:35 AM Reply Like
  • Ruffdog
    , contributor
    Comments (1611) | Send Message
     
    Loaded the truck at $7.11, may have been a little early.
    23 Jan, 11:04 AM Reply Like
  • RHMASSING
    , contributor
    Comments (338) | Send Message
     
    NOK needs a CEO like John Chen with vision and decisiveness in moving the co forward and communicate the strategy. WS needs clarity for its turnaround. At this point people can only guess at what the next steps NOK will take, and thus subject to a range of speculations. In the cc, the co did hint on resuming dividend payment after the MSFT deal. I believe it will be enacted and will provide some support to the share price. In the meantime, we can expect volatility.
    23 Jan, 01:29 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    RHM

     

    The way I see it too. A very smokey, looking through deep water sort of announcement. What will Index funds and banks do? Well, they'll just shake their heads and ignore Nokia. I would too.
    23 Jan, 07:22 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    RH

     

    Nokia could simply say we want Combs to run our business, and we are offering him 1B in MS deal money to come to Nokia.
    25 Jan, 08:30 PM Reply Like
  • ted lujan
    , contributor
    Comments (737) | Send Message
     
    I really liked what I read on 4Q transcript. NSN is in an ideal position to become the main gorilla in the telecom business. It is great to have the best tech and an excellent manager to deploy it. I am willing to average to the down side if necessary. Will add to my position near the close today.
    23 Jan, 02:34 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    Ted

     

    Please post the quote(s) where anyone implied that "NSN is in an ideal position to become the main gorilla in the telecom business."

     

    The way I read it, NSN is flat as a board 2014, and then modest gain, hopefully, from 2015 on, but no real clarity there either.
    23 Jan, 07:24 PM Reply Like
  • ted lujan
    , contributor
    Comments (737) | Send Message
     
    @ DW,

     

    My crystal ball is as good as any ones. I make my own decisions based on the data available.
    The figures I see on NSN leads to the
    gorilla conclusion.
    26 Jan, 12:37 PM Reply Like
  • Doug Dallam
    , contributor
    Comments (8275) | Send Message
     
    TEd

     

    But your conclusion goes against Timo's own future guideline. That doesn't create at least some dissonance?
    27 Jan, 07:42 PM Reply Like
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