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Nokia Q1 Mobile Phone Sales Rise 1%

4/17/2003 09:08:00 AM Eastern

Helsinki, Finland - Mobile handset maker Nokia posted mobile phone sales of $6 billion in the first quarter, up 1 percent from the $5.9 billion recorded in the first quarter of 2002.

The company reported weaker sales in the Americas, but faster overall phone volume growth than the market.

Nokia said mobile phone market volume grew year-on-year for the fourth consecutive quarter, rising by 10 percent, to about 98 million units. The company's own volume grew by 13 percent, to about 38 million units.

Pro forma operating profitability in Nokia's mobile phone segment, considered 'excellent' by the Finnish manufacturer, rose 9 percent, to $1.4 billion in the first three months, up from $1.3 billion in the year-ago period. Margin for mobile phones in the first quarter climbed 170 basis points, hitting 23.9 percent, compared with 22.2 percent in the first quarter of last year.

With a strong performance from mobile phones, Nokia was able to reduce the impact of difficult operating conditions in its network infrastructure business, posting 'solid' overall first-quarter results.

Overall first-quarter sales declined 3 percent, to $7.4 billion, down from $7.7 billion a year earlier. Pro forma operating profit reached $1.3 billion, a decrease from $1.4 billion year over year. First-quarter net profit dropped to $938.9 million, compared with $999 million in the same three months in 2002.

Looking ahead, Nokia expects its mobile phone sales to grow between 4 percent and 12 percent year-on-year. Strong profitability is anticipated to continue.

Overall global handset volume is expected to grow year-on-year, with full-year handset volume anticipated to grow by about 10 percent, compared with the 405 million units in 2002. Nokia's volume growth is expected to be stronger than market growth for the full year 2003.

The company anticipates taking a charge of $382.1 million to $436.7 million in the second quarter. Part of normal operating expenses, the charge relates to restructuring and impairments in its networks segment.

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