Nokia handsets unit being bought by Microsoft sees further drop in sales
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HELSINKI (AP) — The Nokia handsets business that Microsoft is due to take over saw sales continue to slide in the fourth quarter as its Lumia smartphones failed to draw business away from larger competitors like Apple and Samsung.
Nokia Corp. said Thursday its overall business suffered a net loss of 25 million euros ($34 million) in the October to December period, with smartphone sales plunging 29 percent.
The devices and services unit, which will be transferred to Microsoft Corp., saw sales fall to 2.6 billion euros from 3.7 billion euros a year earlier. The unit recorded an operating loss of 191 million euros compared with an operating profit of 97 million a year earlier.
Nokia said it sold 30 million Lumia handsets in the full-year 2013, about twice as many as in 2012. But it failed to pose a challenge to the leaders in the lucrative smartphone sector, Apple Inc. and Samsung Electronics.
Nokia, the former star of the cellphone world, teamed up with Microsoft Corp. in 2011 in hopes of turning the downward trend but it has been further hit by competition from the lower end, by cheaper producers of mobile phones in Asia and China.
Last year, it agreed to a 5.4 billion-euro ($7.2 billion) sale of its ailing handset unit to Microsoft. Shareholders overwhelmingly approved the deal in November and it is expected to be closed during the current quarter, subject to regulatory approval.
Nokia chairman and acting CEO Risto Siilasmaa described the fourth quarter as a watershed for the Finnish company, which will focus on the smaller divisions it will have left after the Microsoft deal.
"During the fourth quarter, Nokia's continuing businesses produced a healthy underlying operating margin of 12 percent," Siilasmaa said. "While the first quarter of the year is seasonally weak for our continuing operations, we continue to expect the closing of the Microsoft transaction to significantly improve Nokia's earnings profile."
Nokia's continuing operations, including its solutions and networks unit, HERE mapping services and advanced technologies saw sales slump to 3.4 billion euros in the fourth quarter, down 21 percent from a year earlier.
Nokia's share price was down more than 3 percent at 5.54 euros on the Helsinki Stock Exchange.
Jari Tanner contributed to this report from Tallinn, Estonia.