Nokia profits take a hit in Q4 2010, down 26% to 1.1 billion euros

CEO Elop admits it's time to change

Nokia profits take a hit in Q4 2010, down 26% to 1.1 billion euros
| Nokia financial news

Nokia (NYSE: NOK) has announced both its full year and fourth quarter financials for 2010.

In Q4 2010, net sales were €12.7 billion ($17.4 billion), up 6 percent year on year.

However, operating profit was €1.1 billion ($1.5 billion), down 26 percent year on year.

As expected, Nokia's Devices & Services division was the key sales driver, up 4 percent year on year to €8.5 billion ($11.6 billion).

As in the two preceding quarters, profitability within the division fell, down 24 percent to €961 million ($1.3 billion) year on year.

Rising reserves

Said figures relate to non-IFRS results, which exclude special items, making yearly and quarterly comparisons more meaningful.

Under alternative accounting principles, Nokia's standard reported operating profit was €884 million ($1.2 billion), down 23 percent from €1.1 billion ($1.6 billion) a year ago.

Nokia operating cash flow was €2.4 billion ($3.3 billion), and it ended the quarter with total cash and other liquid assets of €12.2 billion ($16.7 billion), compared to a total of €10.2 billion ($14 billion) three months previous.

A year of ups and downs

Full year financials for 2010 paint a similar picture, with net sales up 4 percent to €42.5 billion ($58.1 billion) but operating profit down 9 percent to €3.2 billion ($4.4 billion).

As within Q4 2010, Nokia's Device & Services division saw sales rise 5 percent to €29.1 billion.

While previous quarters have shown Nokia's hand in the smartphone market slipped, Q4 2010 saw its worldwide share stabilise at 31 percent.

Yearly mobile shipments hit 452.9 million in 2010, with sales of its smartphones up 48 percent to 100.3 million.

Time to change

Falling profits, however, never make good reading, and Nokia has warned 2011 could start in sticky fashion for the Finnish firm.

However, CEO Stephen Elop said the company is now in a position to react to a shifting mobile market.

"In Q4 we delivered solid performance across all three of our businesses, and generated outstanding cash flow. Additionally, growth trends in the mobile devices market continue to be encouraging," he said.

"Yet, Nokia faces some significant challenges in our competitiveness and our execution. In short, the industry changed, and now it's time for Nokia to change faster."

[source: Nokia]