RSSNokia profits drop 69% in Q4
By Angela Gunn | Published January 22, 2009, 2:11 PM
There's not much fun in Finland either today, as mobile-phone giant Nokia turned in an earnings report reflecting glum economic outlooks worldwide.
The company's 69% drop in Q4 net profits surprised analysts, and the company also took the earnings call opportunity to warn that contingent that sales in 2009 were apt to decline more than previously predicted. The company now says that worldwide sales in '09 are likely to be down 10% year-to-year, rather than the previously predicted 5%; as CEO Olli-Pekka Kallasvuo put it, "the macro environment is challenging and, we believe, will remain so in 2009."
Stating that "historically, Nokia's competitive position has solidified in times of turmoil," Kallasvuo took pains to say that Nokia's proceeding with its current long-term thinking about their business. But they'll be proceeding without about 1,000 employees, who'll be laid off in the near future. CFO Richard Simonson did not give specifics about those job cuts.
The news cast serious shade on Nokia's recent march to world domination. The company is the world's largest maker of mobile handsets, and the company has been aggressively expanding service offerings such as Comes With Music and messaging, particularly overseas.
Nokia has focused strongly on emerging markets, and those markets have taken a particular hit as global economic troubles worsen. Sales of Nokia handsets in China were down a remarkable 36%; in Africa and the Middle East, they were down 23%. Globally, Nokia's market share was 37% -- off by a percentage point since Q3, and by 3% since Q4 2007.
And phone shipments were even down in Q4. 113 million handsets shipped, which is actually fewer than in the previous, non-holiday-season reporting period. That was a surprise; in November, the company said that it expected to maintain or even perhaps increase its market share last quarter. Simonson put it bluntly: "We expected an uptick in sales that did not come."
Smartphones came up during the Q&A session, and there's good news for fans of Nokia's smartphone stylings: The company's still committed to expanding its Symbian series 60 offerings. Kallasvuo notes that though the US is still the strongest smartphone market, the category's isn't limited to that market; as he puts it, the smartphone market "has traction." In particular, the 5800 has gotten off to "a flying start," and "demand is well above supply."
Obviously, when times are strange, strange things happen to product lines on the fringe. Nokia announced yesterday that it will discontinue its N810 Internet Tablet WiMAX edition, believed to be the only device on the market with a built-in WiMAX modem. The non-WiMAX version of the N810 will continue to be available, and Nokia reps have stated that this is just a temporary retrenchment, not a wholesale retreat from the high-speed data standard. (Incidentally, it's the N810 that's the prototype unit for development of Mozilla's mobile Web browser, Fennec.)
The company says it will pay out an annual dividend of 40 euros/share (around $52), down from 53 euros/share (around $69) for 2007.
Nokia shares on the NYSE were down to 12.20, about 11%, at press time. The stock closed on Wednesday at 13.71 and opened today at 12.01.
I'm wondering how Nokia is still the number one handset maker in the world. I do not know anyone who owns a Nokia, or can't tell you right off the top of my head which ones my carrier offers. I can't even tell you the last time I saw a Nokia handset (outside of a product placement in a Britney Spears, Rinanna, or Miranda Cosgrove music video).
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|I have one, but I'll never buy another. For the money, it's a lousy phone, a lousy music player, etc. It works, but just.
Perhaps, if they'd concentrate on fewer phones and make them better than average, someone would care. I'd consider a Motorola phone if the good ones weren't so expensive.
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|OK, OK.
Enough already.
The economy is in the dumps. Is this a newsflash?
Spending is down, and thus company income is down.
Let me guess, the vast majority of companies reporting earnings will report a slow 4th quarter. There, I've scooped you on your next umpteen stories reporting this.
What is the point of giving us a company by company rendition of both incomes and earnings being down on Q4?
Does this demonstrate insight? If anything, your news is a bit late to the party. The only news consists of companies whose services buck the trend.
How about ceasing with the litany of stories where the only question is 'how much' revenue is down and provide a story that actually demonstrates insight and informs us regarding anything that is not a foregone conclusion?
Or might that require actually looking for something newsworthy instead of simply parroting the business page of the Wall Street Journal?
And what? No stories about what dress Michelle Obama wore, and the fact that she lacks the foresight to wear appropriate shoes?
You can do better.
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|Here's what I think of your comment.
http://sethf.com/essays/major/libstupid.php
I'll wait watching my "TV".
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|Hey Scott!
Now HERE is NEWS!!!!
The Tweenboy claims to "think!"
I dare anyone to try to substantiate That claim!
....
And why do I get the feeling that he is equipping himself with hard facts from either Maury Povich's "Whose baby is this?", where he can learn new phrases like "You don't know me!", or Judge Judy, where he gains his prodigious legal knowledge, or TMZ in an effort to keep up with his idol, Britny.....
Make sure your mommy trims those nasty crusts from your sammiches, Tweenboy.
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|Foxfyre, here's a thought: if you don't want to read economic news, don't. If you're going to read the economic news, please keep your comments on topic instead of griping about other posters. You posted something pretty wise in the eBay thread; what's with you on this one? (NONE OF THE REST OF YOU ANSWER. WE ARE INCREASING THE PEACE HERE.)
Seriously, if you think reading these things is stressful and weirdly repetitive, trying writing these stories. The gloom is overwhelming, and having just slogged through the details of Sony's bad day I frankly would like to just push back from the computer and play guitar for an hour. (The neighbors, not to mention Fearless Leader, would probably rather I not.) The good news is that I'm working on a fascinating, substantial, forward-looking piece for later this week, something not related to these awful financials, something nerdy and fun; the bad news is that I am at the moment so crispy I can't focus, and am thus here in comments chatting with you.
But here's the thing. Responsible journalists have to write this stuff up, and not only write the stories but really root through the reports and listen to the calls and analyze what the heck's being said -- not only because it's news but because the details matter. A lot. Sir Howard Stringer sounding on his call like he's ready to stick a string of firecrackers up the collective Sony tailpipe tells me where we are with that firm and where, because they *do* lead so many markets, things might be heading. It *does* matter that Microsoft today acted like they had a pair and announced their job cuts before their earnings call, rather than making like IBM and releasing layoff news afterward. Oracle, Apple, all the firms riding the storm out so far; the magic is in the details. As it is with poorly managed firms who try to sneak their messes under cover of the "ooh, scary economy" excuse. (No names but I think you can guess at least one of the very large dot-coms I'm thinking of here.)
And one more thing, between you and me, to explain why I pick up so many of these calls? Last year, if you remember, just before all hell started to break loose, a particular bald-headed financial-TV-news screamer told a whole lot of people they'd be stupid/crazy to dump Bear Stearns... right before Bear Stearns went ker-blammo. I personally think Screamy Guy ought to be on a breadline for that deeply irresponsible advice. I can't make that happen, but I can do my tiny part to be sure that coverage of the companies in my little sector is both forthright enough and readable enough to help people to make good decisions *without* the likes of Screamy Guy. It's not much, but it's what I can do.
And though I would miss your astute commentary, when you choose to be astute ;-) , it's okay if you choose not to read the stories as long as you promise to be smart about this stuff. And as long as you read the fun / nerdy items of course!
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|The stories don't make me gloomy or depressed. I am well aware of the economic situtation, as are most folks who do not live under a rock.
But simply giving us a blow by blow earnings report and perpetuating the 'gloom' does little to aid understanding. We fully expect earnings to be down! In fact, exceptions to the rule ARE indeed newsworthy, and exactly how and why they have managed to be so due to their market positioning is indeed insightful.
What is not is simply reporting that (fill in the blank)'s earning are down and the market is so gloomy. The entire tech sector, as well as other's are taking a beating.
And as far as mentioning others posters, you might note that the response is in direct response to the repeated inane response posted by one particular single cell organism. At least some of us try to make light of the situation and incorporate a bit of wry wit and humor.
So yes, i acknowledge that it is indeed (figuratively) raining. But I do question whether an analysis if each raindrop, unless it exhibits significantly different market characterisitcs from others, couldn't simply be replaced by a simple list of companies with a total and a % change in revenue indicated. And if they are planning to restructure as a result, a simple indication of the dynamic of that change.
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|It may do little for you, who have expressly admitted you're more a victim of the problem at large than a component of its solution. But it will do a world of good for those of us who are in a position to contribute to the global solution.
If you want the boiled down version of things (Economy: Bad, New Season of "Desperate Housewives": Good) then I'm afraid Betanews is not your publication.
-SF3
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|Still jealous of my "TV" I see, foxfart. [smiles] BTW, has anyone at work noticed your kiddie porn collection yet?
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|SMFulton3, foxfart doesn't have a real life of his own and he only has his fantasy of libertopianism. In 19th century England he would have been an anarchist (Libertopianism is one step away from anarchy.) throwing bombs at people. His kind don't understand what it means to live in a properly functioning society since they are themselves highly dysfunctional and social misfits.
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|Where do you come up with this nonsensical notion that I adhere to a victim mentality as I find no solace in your vapid symbolism over substance "we must do more with less" admonition?
LOL!
Nope! I simply don't buy into empty retreaded platitudes that express no practical solution and simply pander to symbolic group hugs and all holding hands and singing Kumbayah!
Sorry if simply having a President who has yet to do anything, and whose wife wears inappropriate heels to walk in a parade, isn't quite enough to turn the corner of the economic circumstances, but I am in no way a victim.
But it does provide an insight into your perception if you think I have in any way expressed that opinion!
And no, I don't rely on BetaNews for financial market insight. There are many more reporting agencies with much greater acumen in the area. Of course, analytical insights such as "when times are strange, strange things happen" is an insightful in depth analysis of the current market.
"It *does* matter that Microsoft today acted like they had a pair and announced their job cuts before their earnings call, rather than making like IBM and releasing layoff news afterward."
LOL! And you find courage in MS and fault IBM, whose performance is tending to buck the larger trend in many respects! They are wrong for announcing good news relative to a weak market, and then astutely responding to the general trends and adjusting one's workforce in large measure to reflect Pareto's law in the larger economic environment is neither 'chicken' nor underhanded. It is astute planning in anticipation of lean times ahead whereby they minimize areas that are not actively generating the return needed in such times.
But then, neither am I one who, like yourself, simply empathizes with others as they all congregate to chastize a company for strategically analysing treads and adjusting their workforce and investments to optimize their resiliancy - as is their fundamental responsibility. It is amazing to listen to you fault them for doing exactly this despite a better than expected performance in spite of larger market trends.
And whether or not a company will continue to provide free refreshments in the break room is probably not a significant factor nor insight in the long term strategic planning of a company - although it does reflect a "do more with less" philosophy deemed so significant by some! LOL!
What was sorely lacking was an analysis of the characterisitcs of their market approach that allowed them to counter much of the precipatice decline that others in the tech sector have experienced. In that regard, the silence was deafening. And the real meaning lost.
The strengths and weakness of the companies in the current period is a reflection, in large part, of the ongoing strategic strategies that have not been explored here, neither prior to this instance, nor in light of it. THAT is the critical and insightful aspect that could potentially be presented and which would be a valuable addition.
Unfortunately, simply reacting emotionally to earnings and projected layoffs does little to explore or explain said issues. That is of little value except in a social sense. Unfortunately what would be of great value is not necessarily what we are getting in this coverage, despite the amount of work that is being expended. And I admit, such an analysis is not trivial. But that nevertheless is the aspect that has the most value.
But I do find humor and a bit of fun as I take a break from more substantial efforts to read about whether or not Vista is indeed a smash or a bomb, and the ravings of a self-professed socialist tween who posits his TV as the be-all and end-all of computer monitors and proves he lacks any understanding of the labels he tosses about.
I just look for a break here instead of hitting the social whose-it sites. Although, I am a bit disappointed that more space was not allocated to covering Michelle Obama's apparel and comparing her with Jackie O.
;-))
Sey hey, Tweenboy...
Oh, and if you will provide a current photo of yourself, I will be glad to post it... As I am sure it is not only representative of a 'kiddie', but I am sure it is obscene as well.
Well, 'tis past time to get out of here. Wouldn't want to miss a re-run of 2 and 1/2 Men... except I won't be watching it perched 2 foot in front of my TV like some dweebs. ;-)
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|Oh, and instead of a "continuing to do more with less", which implies simply continuing to do the same thing only a bit faster with less resources and which does indeed profess a victim mentality, a better strategy would be to evaluate current changing market trends and to innovate based on the changing needs and opportunities.
Of course, I wouldn't want to interrupt the seemingly unending series of emotional sermons, platitudes, and testimonials that supplanted real thinking and problem solving. ;-)
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