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HELSINKI, FINLAND -Bolstered by increased market share in both its mobile phone and networks businesses, Nokia said it had the strongest annual operating results in its history, and again achieved high profitability.
Sales of mobile phones for the year ended Dec. 31 soared 66 percent to $19.7 billion, compared with $11.9 billion in 1999. Mobile phone sales for the fourth quarter hit $6 billion, compared with $3.8 billion in the year-ago fourth quarter.
Operating profit for mobile phones jumped 57 percent for the year, reaching $4.4 billion, compared with $2.8 billion in 1999. Operating profit for the fourth quarter hit $1.3 billion in mobile phones, compared with $999 million for fourth-quarter 1999.
Total Nokia net sales for the year were $27.6 billion, a 54 percent increase over the $17.8 billion recorded in 1999. Total net sales for the fourth quarter reached $8.4 billion, up from $5.8 billion in the year-ago three months.
Nokia registered an overall net profit increase of 53 percent in 2000, reporting $3.5 billion, compared with $2.3 billion in 1999. For the fourth quarter, overall net profit was $1.1 billion, compared with $768 million in the same three months last year.
Nokia, however, said it expects industry sales of handsets to slow, compared with earlier estimates. This forecast follows a similar slowdown prediction from Ericsson. Both companies face slowing growth rates as phone penetration increases globally.
"Nokia's financial figures for the fourth quarter and 2000 are nothing short of extraordinary," said chairman/ CEO Jorma Ollila. "They confirm that we executed our business plans in accordance with our stated forecast, and building on this strong base, we look forward to the transition toward next-generation technologies."
Nokia estimates first-quarter 2001 sales growth in the region of 25-30 percent, with EPS at the same level as first-quarter 2000. This reflects somewhat slower-than-anticipated market growth during the first quarter, said Nokia, and the company's strategy of aggressively gaining market share, especially in mobile phones.
The profitability outlook for the balance of the year shows mobile phone margins reaching 20 percent, in fourth-quarter 2001 at the latest, said Nokia.