Nokia Reports Lower Profits but Strong Sales
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Nokia, the world's largest cell phone maker, reported lower third-quarter earnings on Thursday after cutting prices to claw back market share, but said sales were strong as it enters the key Christmas season.
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Nokia OYJ reported a 20 percent drop in third-quarter profits on Thursday, citing disappointing mobile phone sales that will likely put a damper on fourth-quarter results as well.
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Nokia reported a 44 percent rise in net profit for the fourth quarter, on sales that increased 34 percent. The company estimates 1.14 billion phones were sold in 2007, 40 percent of them bearing the Nokia brand.The company made net profit for the quarter of &#8364;1.84 billion ($2.7 billion as of Dec. 31, last day of the period reported), up from &#8364;1.27 billion a year earlier.Sales for the quarter rose to &#8364;15.7 billion from &#8364;11.7 billion a year earlier. Growth was dampened by the weakening dollar: at constant currency rates, sales would have grown by 40 percent, the company said.Nokia is counting on its&#160;acquisition of digital mapping data provider Navteq, and its move into the Internet services business, to drive future growth, Chief Financial Officer Rick Simonson said in a conference call with analysts.Basic mobile phones sales now account for less than half the group&#39;s revenue, down from 60 percent a year earlier. Although sales volumes increased, the average selling price of such phones dipped from &#8364;89 to &#8364;83.Around the world, shipments in the quarter increased 26.5 percent, with growth topping 40 percent in Asia. Growth could have been faster were it not for shortages of certain components, Nokia said. Sales fell in North America, Nokia&#39;s smallest geographic market, where shipments dropped 13.6 percent to 5.1 million phones. Nokia blamed the drop on its progressive withdrawal from the market for phones based on CDMA technology, used mainly in North America, to focus on the GSM technology used worldwide.Nokia&#39;s multimedia division saw a 42 percent increase in sales, to &#8364;3.03 billion, and a doubling of operating profit, driven by the success of consumer smartphones such as the N73 and N95, which the company describes as &quot;multimedia computers.&quot; It shipped over 11 million Nseries devices and over 2 million of its Eseries enterprise devices during the quarter.New phones and multimedia devices that began shipping in volume during the quarter accounted for about 30 percent of profits and revenue, said CEO Olli-Pekka Kallasvuo.The company also saw sales more than double at Nokia Siemens Networks, its network equipment joint venture with German conglomerate Siemens.Looking ahead, the company expects mobile phone sales to dip slightly in the first quarter, picking up to grow 10 percent for the full year. It also expects its share of that market to grow, although average selling prices will likely continue to decline, it said.&quot;Much work remains in order to realize our ambitions,&quot; Kallasvuo said. &quot;We will not underestimate the competition.&quot;Nokia will have to address its problems in North America if it wants to increase its share of the mobile phone market further, said Gartner research vice president Carolina Milanesi.The company is working with U.S. operator&#160;Sprint Nextel to build a nationwide WiMax network, but Milanesi does not expect sales of WiMax devices to compensate for the company&#39;s falling CDMA market share during 2008.&quot;It&#39;s not going to happen overnight,&quot; Milanesi said.Simonson found a silver lining to the cloud over Nokia&#39;s performance in North America: with such a small share of the U.S. market, the company has little exposure to the country&#39;s economic troubles.
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Nokia said Thursday that it had extended its share of the global cellphone market to 40 percent in the fourth quarter as profit surged 44 percent on rising sales abroad.
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Palm Inc. PALM.O on Thursday   posted a lower quarterly profit as the maker of the Treo   smartphones spent more money to fend off rivals and sales in   retail stores fell short of expectations.
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Strong sales of new mobile phone models boosts profits at Carphone Warehouse but the retailer's shares fall on concerns at a decline in profits from pre-paid phones.
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Nokia Corp. reported a 13 percent drop in fourth-quarter earnings Thursday, but said it had recovered some market share, revenue had increased and it predicted more growth in 2005.
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Nokia made less money per mobile phone in the third quarter, but profits increased because it sold a lot more phones, the company says.
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Stockholm - Nokia, the world&#39;s biggest cellphone maker, took market share in the second quarter by cutting prices and introducing new models, rebounding from its lowest level since 1999, market researcher Gartner said yesterday.
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German phone giant Deutsche Telekom sees annual profits fall, following tough competition and lower prices.
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The world's top cellphone  maker Nokia on Tuesday cut its profit margin forecasts for the  next two years and joined market analysts in forecasting slower  growth for the global mobile phone market in 2007.
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Nokia was a leading gainer Wednesday as European stock markets clawed back some of the steep losses from the previous session.
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Robust demand for new cheaper phones boosted third-quarter earnings at Nokia Oyj, the world's biggest maker of mobile phones, with the better than expected result sending its shares sharply higher.
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Nokia Corp. increased its global market share of mobile phone handsets for a second successive quarter, reaching 30.9 percent with sales of 51.7 million units, market researcher Gartner Inc.
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Nokia has reported a 20% decline in net profit for the third quarter, due largely to cuts it made in the prices for its mobile phones and predicted that earnings would fall again in the fourth quarter.
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Nokia Corp. on Tuesday cut its operating margin targets, blaming increased exposure to the network infrastructure business. It also predicted global sales of mobile phones would grow by 10 percent in 2007.
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Mobile phone maker Sony Ericsson today reported that it had more than trebled third quarter pre-tax profits, but the market leader, Nokia, reported a 20% fall.