Nokia's 2012 report shows sign of recovery

HELSINKI - After being beleaguered for over one and a half years, Finnish mobile phone manufacturer Nokia took on a positive look at the turn of the year, according to the annual report released by the company on Thursday.

In the last quarter of 2012, Nokia gained 439 million euros ($584 million) of operating profits. In the same period of 2011, the company reported an operating loss of 954 million euros.

The report said that the operating profitability was "boosted by profits from NSN (Nokia Siemens Networks). Nokia's net cash position was strengthened by nearly 800 million euros, of which 650 million euros were generated by NSN."

According to Timo Seppala, a researcher from the Research Institute of the Finnish Economy, NSN's success was mainly based on the structural changes in organization and products portfolio. But "it is still too early to make predict for the longer-term development," Seppala added.

Nokia's net sales of devices continued to decline in 2012 at year-on-year level by 34 percent. However, at quarter-on-quarter level, Nokia's net sale of smart devices increased by 26 percent and mobile phones by 4 percent in Q4 of 2012, showing a sign of positive trend.

Nevertheless, according to news released by Finnish broadcasting company Yle, in 2012, Nokia's net sales of Smart phone was 6.6 million units, still far behind Apple's 47 million and Samsung's 55 million.

Nokia's CEO Stephen Elop appeared satisfied with the company's performance.

"We are very encouraged that our team's execution against our business strategy has started to translate into financial results. Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012," he commented.

He attributed the success to the measures to strengthen financial position, improve underlying operating margin in Devices & Services, introduce the HERE brand to expand the mapping and location experiences, and drive record profitability in Nokia Siemens Networks.

Nokia, a global leader in communication technologies, used to be a dominator in the international mobile phone market. Challenged by rivals like Apple and Samsung, it has fallen into a difficult situation since 2009.

The company started strategic transformation in the beginning of 2011 by building up cooperation with Microsoft and producing Windows-based smart phones. In the end of 2011, Nokia started to launch its series of Lumia smart phone, which sold pretty well in the high-end market.