Nokia's Lumia may have been boost to Q4 sales

Nokia Corp. signaled Thursday its smartphone partnership with Microsoft was starting to reap rewards as it revealed that fourth-quarter mobile phone sales exceeded expectations and that its handset business would return to profitability.

The Finnish company's share price surged 11 percent to close at 3.32 Euros on Helsinki Stock Exchange.

Nokia said it sold 86 million devices in the last three months of 2012, including some 4.5 million Lumia smartphones, while revenues amounted to some 3.9 billion Euros. A year earlier, it posted a fourth-quarter net loss of 1 billion Euros with a 19-percent plunge in revenue.

The cellphone maker said it sold 15.9 million smartphones in the quarter, up from 6.3 million in the previous quarter.

Nokia has been struggling in the fierce top-end race against Apple Inc. and Samsung and is now also losing ground to Asian makers in lower-end devices. Samsung overtook it as the world's No. 1 cellphone maker early last year after Nokia led the field for 14 years. In 2011, Nokia announced that it would join forces with Microsoft to produce a smartphone that would run on Windows software. The latest Windows handset, the Lumia was launched last year.

CEO Stephen Elop said he was pleased with the company's "solid" fourth-quarter performance.

"We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability," he said. "We focused on our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently, and Nokia Siemens Networks delivered yet another very good quarter."

The company said operating expenses in the last quarter of 2012 had been lower than expected and that its devices and services sector saw operating margins of "between break even and positive 2 percent." Elsewhere, its networks joint venture with Germany's Siemens AG - Nokia Siemens Networks - had "record underlying profits and a third consecutive quarter of underlying profitability," with operating margins expected to be 13-15 percent.

However, the company warned that seasonality and competition would have a negative impact on the handset division's first-quarter profitability in comparison to the last three months of 2012. Nokia is due to report fourth-quarter earnings on Jan. 24.