After 18 loss-making months, Finnish mobile phone maker Nokia returned to profit in the last quarter of 2012, thanks to a drastic restructuring initiative.

Nokia’s profit was €255 million for the quarter, compared to loss of almost €1 billion in the fourth quarter of 2011.

In June last year, Nokia announced that it would be cutting 10,000 jobs. Last week, it revealed that it would be cutting 300 IT jobs and outsourcing 850 more – the last of the 10,000 job cuts to be enacted.

The company’s revenues are still in freefall – down 20% year-on-year to €8 billion during the quarter.

Sales at the all-important smartphone unit dropped 36% year-on-year to €3.9 billion. This was partly due to the fact that the company divested its "luxury smartphone" business, vertu, in June 2012, Nokia said.

Nokia said it shipped 15.9 million smartphones during the quarter. These shipments comprised 4.4 million Windows Phone-based Lumia devices; 2.2 million Symbian smartphones; and 9.3 million of its Asha touchscreen phones.

Sales for the full year dropped 22% year-on-year to €30 billion, and the company lost €3.8 billion.

"We are very encouraged that our team’s execution against our business strategy has started to translate into financial results," said Nokia CEO Stephen Elop. "Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012."