Finnish 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.
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.