The company also said that it would suspend its annual dividend, the first time in more than two decades that Nokia has taken that step.
For the full year, Nokia posted an EPS loss of €0.17 (about $0.23) on revenues of €30.18 billion (about $40.2 billion). The consensus estimate called for an EPS loss of $0.26 on revenues of $39.62 billion.
The company’s CEO said:
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.
The visit to profitability will be brief. For the first quarter of 2013, Nokia is forecasting a negative 2% operating margin (plus or minus 4 percentage points). In the fourth quarter, operating margin totaled 7.2%.
One bright spot is the joint venture with Siemens A.G. (NYSE: SI), Nokia Siemens Networks, which is expected to post a 3% operating margin in the first quarter. Sales were up 5% year-over-year and operating profit rose more than 200%. Sequentially, operating profit rose 78%.
Nokia’s unit sales of smartphones in the fourth quarter were down 66% compared with the same period a year ago. The average selling price rose 33% on smart devices, but fell 3% on other mobile devices. In the fourth quarter Nokia sold 4.4 million Lumia smartphones, which use the Windows Phone operating system from Microsoft Corp. (NASDAQ: MSFT), and 9.3 million Asha phones, which the company calls smartphones and the rest of the industry calls feature phones.
Nokia’s shares are down about 3% in premarket trading, at $4.50 in a 52-week range is $1.63 to $5.87. Thomson Reuters had a consensus analyst price target of around $3.23 before today’s report. Nokia’s shares have risen about 58% in the past three months.