(Telecompaper) Nokia reported a double-digit drop in sales and profits from its continuing activities in the fourth quarter, while its handset business to be sold to Microsoft also remained in the red. The continuing operations, which include the network equipment business NSN, navigation service Here and IP licensing through the Advanced Technologies unit, recorded revenues of EUR 3.476 billion, down 21 percent from a year earlier. Adjusted operating profit fell 39 percent to EUR 408 million, and EPS declined 17 percent to EUR 0.05. All three divisions reported lower sales and operating. At the Devices & Services division, reported as discontinued activities, sales fell 29 percent year-on-year and were 5 percent lower than in Q3, at EUR 2.633 billion. The adjusted operating margin worsened to negative 7.3 percent, from 1.3 percent a year ago and 4.7 percent in Q3. Nokia highlighted the sequential improvement in NSN's results and forecast an improvement in group profitability once the Microsoft transaction closes, expected later this quarter. While Q1 is expected to be seasonally weak, NSN targets an improvement in its adjusted operating margin over the full year 2014 to the high end of its long-term forecast of 5-10 percent, compared to a result of 3.7 percent in 2013. This will be helped by a renewed sales drive in the second half of the year. Advanced Technologies should also get a boost from the licensing deal with Microsoft and a new five-year licensing agreement announced with Samsung.