Nokia Q4 2011 issues

Nokia (OMX: NOK1V) Q4 2011 net sales were just over 10 billion Euros vs. 12.6 billion in Q4 2010 Reported EPS was negative at minus 29 cents a share and non-IFRS results was six cents a share. The reported numbers are down mostly due to 1.09 billion partial impairment of goodwill in Location & Commerce (the segment with NAVTEQ and social location services). The stock has been swinging as the markets are digesting the news but seems to have found some solid footing at the moment and is up by 6% for the day 20 minutes after the report.

Net cash and other liquid assets stood at 5.6 billion Euros at the end of Q4 2011, which is around 1.5 billion less than a year ago. Nokia is cutting its dividend in half to 20 cents a share. The company has increased investments in Lumia smartphones and commented it has sold ”well over a million of those until now”.

CEO Stephen Elop was pleased with the performance and steps undertaken towards re-establishing the brand. In his view Lumia shows Nokia belongs on the field in the ”war of ecosystems”. Nokia is planning to bring Lumia to China and Latin America in H1 2012. Dual SIM business particularly in India kept Nokia afloat on this quarter.

Nokia is now estimating less Symbian sales than it was anticipating just recently as the company acknowledges that competitors have made progress in the lower-priced smartphones. The company expects non-IFRS Devices & Services operating margin in Q1 2012 to break even +- 2%. The provided outlook is very fuzzy and thus does nothing to remove the uncertainty. The company said there has been a greater-than-normal seasonal decline Devices & Services in Q1 so far. Nokia Siemens Networks is estimated to be loss making with substantial charges in Q1 and considerable improvement should come from 2013 onward. Nonetheless NSN's quarterly performance was better than feared.

As had been assumed before, Nokia’s Nomination Committee is suggesting to the AGM that current Board member Risto Siilasmaa should be elected as the new Chairman and Dame Marjorie Scardino as Vice Chairman. The committee is also suggesting Procter & Gamble CTO Bruce Bowen, Eucalyptus Systems, Inc CEO Mårten Mickos and Independent Corporate Advisor Elizabeth Nelson as new members of the Board as former Chairman Jorma Ollila and Board members Bengt Holmström and Per Karlsson will be stepping down.