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Nokia Q3 Mobile Phone Sales Increase 7%

10/17/2002 10:22:00 AM Eastern

Helsinki, Finland - Spurred by the arrival of an increasing number of mass-volume mobile phones with color and multimedia messaging capability, handset maker Nokia reported a 7 percent sales increase in its Mobile Phones division, hitting $5.5 billion in the third quarter, up from $5.2 billion in the year-ago period.

Operating profit in the Mobile Phones segment, by far the company's largest, soared 25 percent in the third quarter, reaching $1.2 billion, up from $961 million in the same three months last year, including charges. Margins in the phones business exceed Nokia's expectations, at what it called a 'healthy' 22.2 percent.

Nokia said the positive visibility of these new phones suggests overall market volume for 2002 will reach earlier expectations of 400 million units sold.

For the nine months, sales in the Mobile Phones division were flat, coming in at $16.2 billion for the period, compared with $16.1 billion a year ago.

Operating profit for Mobile Phones in the nine months, including charges, reached $3.5 billion, up from $3 billion the previous year.

Overall Nokia sales edged up 2 percent in the third quarter, hitting $7.1 billion, compared with $6.9 billion year-on-year. Looking ahead, Nokia anticipates fourth quarter sales to grow by 2 percent to 5 percent year on year, and to be in the range of $8.7 billion to $9 billion.

Nokia operating profit in the third quarter, including charges, reached $843.2 million, compared with $278.8 million in the same three months in 2001. Nokia reported a $300 million one-time charge related to long-term financing and $53 million in goodwill amortization. Excluding charges, operating profit rose 14 percent in the third quarter, to $1.2 billion, from $1.1 billion last year.

Net profit, including charges, came in at $598.8 million, up from $182.6 million in the same quarter last year. Excluding charges, net profit climbed 16 percent in the third quarter, to $864.8 million, compared with $746 million year over year.

For the nine months, overall Nokia sales dropped 5 percent, to $20.8 billion, from $22 billion in the same period in 2001.

Net profit in the nine months, including charges, reached $2.3 billion, up from $1.7 billion in the same nine months in 2001. Excluding charges, net profit was $2.7 billion, an increase of 2 percent over the $2.6 billion reported last year.