Mobile Companies' Q3 Sales Take Hit From Failing Market

Helsinki, Finland — Boosted by sales in the United States and the Asia-Pacific region, the Nokia Mobile Phones segment — by far the company's largest — logged sales of $4.73 billion in the third quarter. However, this figure was a 3 percent decline from sales of $4.98 billion registered in the third quarter of 2000, due primarily to a sales decline in Europe, Nokia said.

Pro forma operating profit for Nokia's phone division in the third quarter ended Sept. 30, excluding goodwill amortization and non-recurring items, dropped 6 percent to $899.5 million, compared with $959.6 million in the same quarter last year.

Nokia's 3 percent sales decline in mobile phones during the third quarter compares with a decline of about 10 percent in global volume vs. the previous year, according to the company's preliminary estimates. The global dip mainly reflects a demand slowdown in Europe related to a weak upgrade market.

Fourth-quarter market volume is expected to be larger than the third quarter, bringing Nokia's estimate for full-year 2001 total market volume to about 390 million phones.

"We believe that a continuous flow of new product designs and categories, such as the Nokia 5510, launched in mid-October as an entertainment content platform, and the advent of color screens, will build momentum for the next market wave," chairman/CEO Jorma Ollila said.

For the nine months, sales for the Nokia Mobile Phones segment reached $14.77 billion, compared with $13.63 billion in the same period in 2000. Pro forma operating profit for the phones division was $2.84 billion for the nine months, down from $3.10 billion in the same period last year.

Overall Nokia sales in the third quarter dipped 7 percent to $6.33 billion, down from $6.80 billion in the year-ago third quarter. Pro forma operating profit slid 21 percent, to $961.4 million, compared with $1.21 billion in the same three months last year. Overall net profit declined 18 percent, to $682.3 million, down from $828.6 million in the same quarter in 2000.

For the nine months, overall sales at Nokia reached $20.11 billion, compared with $18.93 billion in the year-ago nine months. Pro forma operating profit was $3.27 billion in the nine months, down from $3.70 million in the same period in 2000. Overall net profit for the nine months dropped to $2.37 billion, down from $2.53 billion in the previous year.