Nokia Ditches Dividend for First Time in 20 Years

It posted its first quarterly profit in more than a year

   

Nokia Ditches Dividend for First Time in 20 Years

nokia storefront 630 300x200 Nokia Ditches Dividend for First Time in 20 YearsFinnish handset maker Nokia (NYSE:NOK) announced on Thursday that it had turned a profit during the fourth quarter, but it would suspend dividend payments this year.

Investors didn’t like the news, sending Nokia shares down almost 8% in Thursday morning trading.

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This marks the first year since 1989 that Nokia won’t pay a dividend. Last year, the company distributed $987 million in dividends even though it was facing steep losses, The Wall Street Journal noted.

Suspending dividend payments will help increase Nokia’s cash reserves, which totaled about $5.8 billion at the end of last year.

During the fourth quarter, Nokia posted earnings of $269 million, compared to the $1.4 billion loss it recorded during the same period in the prior year. That snapped a series of six consecutive quarterly losses.

However, the company posted an annual loss of $4.14 billion, more than double the $1.5 billion it lost in 2011.

Nokia’s fortunes have been boosted by strong sales of its Lumia line of smartphones running Microsoft’s (NASDAQ:MSFT) Windows Phone operating system.

Once the cell-phone market leader, Nokia sales tumbled in the face of competition from Apple‘s (NASDAQ:AAPL) iPhone and smartphones running Google‘s (NASDAQ:GOOG) Android operating system. Nokia has lately been engaged in a frantic program of asset sales and payroll cuts to lower expenses.


Article printed from InvestorPlace Media, http://investorplace.com/2013/01/nokia-ditches-dividend-for-first-time-in-20-years/.

©2014 InvestorPlace Media, LLC

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