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Nokia Cellphone Segment Sales Jump 15%

10/20/2005 09:15:00 AM Eastern

Helsinki, Finland — Good demand, product competitiveness and relatively firm prices drove third-quarter sales at mobile phone maker Nokia, with revenue in the company’s mobile phones segment rising 15 percent to $6.2 billion from a year-ago $5.4 billion.

In smartphones, total industry volume reached about 14 million units in the third quarter, ended Sept. 30, with Nokia’s smartphone volume growing to 7.1 million units, compared with 2.1 million units in the same quarter the previous year, the company said.

Nokia reported third-quarter mobile phone sales into North America declined year-on-year, with mobile device shipments sliding 13 percent to 5.8 million units, down from 6.6 million in the same period in 2004. Mobile devices include business in the mobile phones, multimedia and enterprise solutions segments.

Overall Nokia mobile device volume reached 66.6 million units in the third quarter, a 29.5 percent year-over-year rise, compared with 51.4 million units in the third quarter last year. Industry volume is expected to reach about 780 million units in 2005, primarily due to an expanding mobile subscriber base in developing markets.

Operating profit in the company’s mobile phones segment grew 4 percent in the third quarter, reaching $1.1 billion, from $1 billion a year ago, due mainly to a strong product portfolio and effective cost management, said Nokia. However, operating margin slipped to 16.9 percent in the three months, down from 18.8 percent in the third quarter in 2004.

Record volume and strong execution in mobile devices drove consolidated third-quarter sales up 18 percent, hitting $10.1 billion, from $8.5 billion in the same three months the prior year. At constant currency, Nokia third-quarter sales would have increased 23 percent, according to the company.

Consolidated operating profit in the third quarter jumped 19 percent, coming in at $1.4 billion, compared with $1.2 billion year-on-year. Net profit hit $1.1 billion, up 29 percent from the $822.2 million recorded last year, driven by “excellent performance” in the company’s device businesses.

For the nine months, mobile phones segment sales increased 15 percent to $17.5 billion from a year-ago $15.2 billion. However, operating profit in the segment slipped 5 percent for the nine months, reaching $3 billion, compared with $3.2 billion in the same period last year.

Consolidated sales in the nine months soared 20 percent to $28.6 billion from $23.9 billion, while net profit was up 21 percent to $3.1 billion for the period, compared with a year-over-year $2.5 billion.