Nokia Corporation (ADR) (NYSE:NOK) announced this morning that it would get rid of its dividend even though it posted profits and beat analysts’ expectations in its fourth quarter earnings report. As a result some investors have turned on the company, dumping the stock in pre-market trades in New York. The stock initially fell more than 5 percent before opening bell, erasing the gains the stock made since Friday.
Officials at Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V) said they decided to dump the dividend so that the company could have more time to turn things around. Nokia’s fourth quarter profits of $269 million were the first after the company posted losses six quarters in a row. It seems at this point that the company’s leap of faith into the Windows 8 platform for its Lumia phones is working in its favor. Nokia Corporation (NYSE:NOK) also posted good news regarding the performance of the Nokia Siemens Networks, in which it partners with Siemens AG (ADR) (NYSE:SI).
Nokia’s shareholders likely weren’t very surprised that the company decided to suspend its dividend, although it’s still a disappointment. Even though Nokia posted losses last year, shareholders still earned a dividend.
Analysts at SEB Enskilda issued a report to investors on shares of Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V)this morning. They said the company’s cash situation of $5.81 billion is “clearly better” and “well ahead” of the consensus of $4.78 billion. The company’s 18 percent gross margin for its smart devices was also well ahead of consensus, which was 11.7 percent. At this point the company is working to reduce its operating expenses and production overheads.
SEB Enskilda analysts said they believe Nokia Corporation (NYSE:NOK) (HEL:NOK1V) (BIT:NOK1V)’s report has more positive elements than negative ones. They say the company’s cash situation is one of the best parts of that report. They have given shares of Nokia a Buy rating and maintained their $5.59 target price for the stock.