Nokia stock is falling on news that the company will not pay its hefty dividend. Nokia was paying a dividend that yielded about 4%.
Despite the elimination of a stream of cash to shareholders, the dividend cut is good for Nokia because its cash stood only at 4.36 billion euros at the end of December. Even though this was an increase of 796 million euros from the end of September, the cash level at Nokia is dwarfed against $137 billion cash at Apple. The savings from the dividend cut will allow Nokia to invest more in its business and give it more time to complete the turn around. All three major credit rating firms have already cut Nokia’s debt rating to junk.
Nokia has been turning around slowly after its gutsy decision to abandon its in-house smartphone platform and support Microsoft Office Phone operating system. Nokia Lumia series is successfully competing with both Apple iPhones and Google Android based devices.
The stock has moved up strongly since I published in Forbes, Proof Positive Of Nokia Turnaround With 4.4 Million Lumia Phones Sold. It is important to note that results mentioned in the prior piece were preliminary. Nokia has just released its earnings report. The results are in line with the preliminary results described in the prior piece...Read more at Forbes
