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Nokia Mobile Phone Sales Jump 30%

4/20/2006 10:04:00 AM Eastern

Helsinki, Finland — Sales in the mobile phone segment at Nokia increased 30 percent in the first quarter, hitting $7.2 billion, up from $5.6 billion in the same three months last year. Net sales increased year-on-year in all regions, with growth in North America the strongest, said the company.

Mobile phone operating profit for the first quarter, ended March 31, soared 25 percent, reaching $1.3 billion, compared with $1.1 billion in the same three months the prior year. Operating margin for the mobile phone segment dipped to 18.5 percent in the first quarter, down from 19.2 percent year-over-year.

Much of the margin decrease can be attributed to lower phone pricing, which slipped to a $127 average per handset in the first quarter, down 6 percent year-on-year from the selling average of $136.

Nokia said it shipped 75.1 million handsets in the first quarter, a 40 percent annual increase, while its global mobile phone share increased to 35 percent, up 1 percentage point year-over-year. It expects the global phone market to rise 15 percent above the company’s 12-month sales prediction of 795 million units.

The mobile phone segment first quarter operating profit included a $17.3 million restructuring charge.

Consolidated first quarter revenue at Nokia increased 29 percent, to $11.7 billion, from a year-on-year $9.1 billion, with sales in the United States almost doubling year-on-year, said the company. First quarter sales to North America came in at $1.2 billion, up from $615.1 million in the same three months in 2005.

At constant currency, consolidated Nokia first quarter net sales would have increased 23 percent.

Nokia’s first quarter operating profit jumped 22 percent, to $1.7 billion, from $1.4 billion in the same three months in 2005. This included the negative impact from $22 million in special items registered in the first quarter of 2006.

Consolidated net profit in the first quarter moved up 21 percent, hitting $1.3 billion, from a year-ago $1.1 billion. The company’s operating margin in the first three months slipped to 14.4 percent, from a year-earlier 15.1 percent.