Plugging the leak
Nokia re-released some historical quarterly and annual earnings summaries in order to reflect the new organisational structure it implemented on 1 April 2011. The key delineation in these new figures is a separation of the smartphone business (smart devices) from feature-phones (mobile phones).
We've reproduced all the regrouped results below and they all tell more or less the same story about the two subdivisions. The gross profit from smartphones is slightly higher than from feature-phones, despite there being a slightly higher cost of sales. But operating expenses for the smartphone business are more than twice those of the feature-phone business.
This is presumably in part due to the greater hardware complexity of the devices, but a lot of that is probably software development, which Nokia famously spends more on than Apple. As a result of this much larger operating expenses budget, the 'contribution' of the feature-phone division to the overall profitability of the company is much higher.
It's easy to imagine Stephen Elop looking at these figures when he was mulling over what to do with his new challenge and concluding something has to be done about those smartphone operating expenses. The answer he came up with was: WP7.
FIRST QUARTER 2010, REPORTED, EUR million
(unaudited)
|
|
Smart Devices 1-3/2010 |
Mobile Phones 1-3/2010 |
Devices & Services Other 1-3/2010 |
Devices & Services 1-3/2010 |
NAVTEQ 1-3/2010 |
Nokia Siemens Networks 1-3/2010 |
Corporate Common 1-3/2010 |
Eliminations 1-3/2010 |
Nokia Group 1-3/2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
3 362 |
3 194 |
107 |
6 663 |
189 |
2 718 |
- |
-48 |
9 522 |
|
Cost of sales |
-2 211 |
-2 234 |
-62 |
-4 507 |
-29 |
-1 936 |
- |
28 |
-6 444 |
|
Gross profit 1) |
1 151 |
960 |
45 |
2 156 |
160 |
782 |
- |
-20 |
3 078 |
|
% of net sales |
34.2 |
30.1 |
42.1 |
32.4 |
84.7 |
28.8 |
|
|
32.3 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
-829 |
-340 |
-194 |
-1 363 |
-237 |
-1 015 |
-12 |
- |
-2 627 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
28 |
- |
10 |
38 |
- |
7 |
-8 |
- |
37 |
|
|
|
|
|
|
|
|
|
|
|
|
Contribution |
350 |
620 |
-139 |
|
|
|
|
|
|
|
% of net sales |
10.4 |
19.4 |
-129.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit 1) |
|
|
|
831 |
-77 |
-226 |
-20 |
-20 |
488 |
|
% of net sales |
|
|
|
12.5 |
-40.7 |
-8.3 |
|
|
5.1 |
|
1) Elimination of profits recognized in NAVTEQ that are deferred in Devices & Services related to Ovi Maps service sold in combination with Nokia's GPS enabled smartphones. |
|||||||||
SECOND QUARTER 2010, REPORTED, EUR million
(unaudited)
|
|
Smart Devices 4-6/2010 |
Mobile Phones 4-6/2010 |
Devices & Services Other 4-6/2010 |
Devices & Services 4-6/2010 |
NAVTEQ 4-6/2010 |
Nokia Siemens Networks 4-6/2010 |
Corporate Common 4-6/2010 |
Eliminations 4-6/2010 |
Nokia Group 4-6/2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
3 503 |
3 190 |
106 |
6 799 |
252 |
3 039 |
- |
-87 |
10 003 |
|
Cost of sales |
-2 374 |
-2 304 |
-69 |
-4 747 |
-47 |
-2 170 |
- |
32 |
-6 932 |
|
Gross profit 1) |
1 129 |
886 |
37 |
2 052 |
205 |
869 |
- |
-55 |
3 071 |
|
% of net sales |
32.2 |
27.8 |
34.9 |
30.2 |
81.3 |
28.6 |
|
|
30.7 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
-848 |
-374 |
-206 |
-1 428 |
-283 |
-1 034 |
-29 |
- |
-2 774 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
2 |
1 |
16 |
19 |
-3 |
-14 |
-4 |
- |
-2 |
|
|
|
|
|
|
|
|
|
|
|
|
Contribution |
283 |
513 |
-153 |
|
|
|
|
|
|
|
% of net sales |
8.1 |
16.1 |
-144.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit 1) |
|
|
|
643 |
-81 |
-179 |
-33 |
-55 |
295 |
|
% of net sales |
|
|
|
9.5 |
-32.1 |
-5.9 |
|
|
2.9 |
|
1) Elimination of profits recognized in NAVTEQ that are deferred in Devices & Services related to Ovi Maps service sold in combination with Nokia's GPS enabled smartphones. |
|||||||||
THIRD QUARTER 2010, REPORTED, EUR million
(unaudited)
|
|
Smart Devices 7-9/2010 |
Mobile Phones 7-9/2010 |
Devices & Services Other 7-9/2010 |
Devices & Services 7-9/2010 |
NAVTEQ 7-9/2010 |
Nokia Siemens Networks 7-9/2010 |
Corporate Common 7-9/2010 |
Eliminations 7-9/2010 |
Nokia Group 7-9/2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
3 612 |
3 364 |
197 |
7 173 |
252 |
2 943 |
- |
-98 |
10 270 |
|
Cost of sales |
-2 509 |
-2 506 |
-77 |
-5 092 |
-39 |
-2 241 |
1 |
42 |
-7 329 |
|
Gross profit 1) |
1 103 |
858 |
120 |
2 081 |
213 |
702 |
1 |
-56 |
2 941 |
|
% of net sales |
30.5 |
25.5 |
60.9 |
29.0 |
84.5 |
23.9 |
|
|
28.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
-773 |
-382 |
-184 |
-1 339 |
-263 |
-966 |
-19 |
- |
-2 587 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
5 |
3 |
57 |
65 |
2 |
-18 |
- |
- |
49 |
|
|
|
|
|
|
|
|
|
|
|
|
Contribution |
335 |
479 |
-7 |
|
|
|
|
|
|
|
% of net sales |
9.3 |
14.2 |
-3.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit 1) |
|
|
|
807 |
-48 |
-282 |
-18 |
-56 |
403 |
|
% of net sales |
|
|
|
11.3 |
-19.0 |
-9.6 |
|
|
3.9 |
|
1) Elimination of profits recognized in NAVTEQ that are deferred in Devices & Services related to Ovi Maps service sold in combination with Nokia's GPS enabled smartphones. |
|||||||||
FOURTH QUARTER 2010, REPORTED, EUR million
(unaudited)
|
|
Smart Devices 10-12/2010 |
Mobile Phones 10-12/2010 |
Devices & Services Other 10-12/2010 |
Devices & Services 10-12/2010 |
NAVTEQ 10-12/2010 |
Nokia Siemens Networks 10-12/2010 |
Corporate Common 10-12/2010 |
Eliminations 10-12/2010 |
Nokia Group 10-12/2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
4 396 |
3 947 |
156 |
8 499 |
309 |
3 961 |
- |
-118 |
12 651 |
|
Cost of sales |
-3 111 |
-2 822 |
-86 |
-6 019 |
-38 |
-2 919 |
- |
52 |
-8 924 |
|
Gross profit 1) |
1 285 |
1 125 |
70 |
2 480 |
271 |
1 042 |
- |
-66 |
3 727 |
|
% of net sales |
29.2 |
28.5 |
44.9 |
29.2 |
87.7 |
26.3 |
|
|
29.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
-882 |
-410 |
-218 |
-1 510 |
-288 |
-1 022 |
-47 |
- |
-2 867 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
145 |
1 |
-98 |
48 |
-2 |
-19 |
4 |
-7 |
24 |
|
|
|
|
|
|
|
|
|
|
|
|
Contribution |
548 |
716 |
-246 |
|
|
|
|
|
|
|
% of net sales |
12.5 |
18.1 |
-157.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit 1) |
|
|
|
1 018 |
-19 |
1 |
-43 |
-73 |
884 |
|
% of net sales |
|
|
|
12.0 |
-6.1 |
0.0 |
|
|
7.0 |
|
1) Elimination of profits recognized in NAVTEQ that are deferred in Devices & Services related to Ovi Maps service sold in combination with Nokia's GPS enabled smartphones. |
|||||||||
FULL YEAR 2010, REPORTED, EUR million
(unaudited)
|
|
Smart Devices 1-12/2010 |
Mobile Phones 1-12/2010 |
Devices & Services Other 1-12/2010 |
Devices & Services 1-12/2010 |
NAVTEQ 1-12/2010 |
Nokia Siemens Networks 1-12/2010 |
Corporate Common 1-12/2010 |
Eliminations 1-12/2010 |
Nokia Group 1-12/2010 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
14 873 |
13 695 |
566 |
29 134 |
1 002 |
12 661 |
- |
-351 |
42 446 |
|
Cost of sales |
-10 205 |
-9 866 |
-294 |
-20 365 |
-153 |
-9 266 |
1 |
154 |
-29 629 |
|
Gross profit 1) |
4 668 |
3 829 |
272 |
8 769 |
849 |
3 395 |
1 |
-197 |
12 817 |
|
% of net sales |
31.4 |
28.0 |
48.1 |
30.1 |
84.7 |
26.8 |
|
|
30.2 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
-3 332 |
-1 506 |
-802 |
-5 640 |
-1 071 |
-4 037 |
-107 |
- |
-10 855 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
180 |
5 |
-15 |
170 |
-3 |
-44 |
-8 |
-7 |
108 |
|
|
|
|
|
|
|
|
|
|
|
|
Contribution |
1 516 |
2 328 |
-545 |
|
|
|
|
|
|
|
% of net sales |
10.2 |
17.0 |
-96.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit 1) |
|
|
|
3 299 |
-225 |
-686 |
-114 |
-204 |
2 070 |
|
% of net sales |
|
|
|
11.3 |
-22.5 |
-5.4 |
|
|
4.9 |
|
1) Elimination of profits recognized in NAVTEQ that are deferred in Devices & Services related to Ovi Maps service sold in combination with Nokia's GPS enabled smartphones. |
|||||||||
FIRST QUARTER 2011, REPORTED, EUR million
(unaudited)
|
|
Smart Devices 1-3/2011 |
Mobile Phones 1-3/2011 |
Devices & Services Other 1-3/2011 |
Devices & Services 1-3/2011 |
NAVTEQ 1-3/2011 |
Nokia Siemens Networks 1-3/2011 |
Corporate Common 1-3/2011 |
Eliminations 1-3/2011 |
Nokia Group 1-3/2011 |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
3 528 |
3 407 |
152 |
7 087 |
232 |
3 171 |
- |
-91 |
10 399 |
|
Cost of sales |
-2 475 |
-2 457 |
-92 |
-5 024 |
-37 |
-2 324 |
- |
60 |
-7 325 |
|
Gross profit 1) |
1 053 |
950 |
60 |
2 063 |
195 |
847 |
- |
-31 |
3 074 |
|
% of net sales |
29.8 |
27.9 |
39.5 |
29.1 |
84.1 |
26.7 |
|
|
29.6 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
-835 |
-386 |
-167 |
-1 388 |
-258 |
-990 |
-22 |
- |
-2 658 |
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses |
- |
-2 |
17 |
15 |
1 |
1 |
6 |
- |
23 |
|
|
|
|
|
|
|
|
|
|
|
|
Contribution |
218 |
562 |
-90 |
|
|
|
|
|
|
|
% of net sales |
6.2 |
16.5 |
-59.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit 1) |
|
|
|
690 |
-62 |
-142 |
-16 |
-31 |
439 |
|
% of net sales |
|
|
|
9.7 |
-26.7 |
-4.5 |
|
|
4.2 |
|
1) Elimination of profits recognized in NAVTEQ that are deferred in Devices & Services related to Ovi Maps service sold in combination with Nokia's GPS enabled smartphones. |
|||||||||
