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Nokia Mobile Phone Sales Down 6%

Helsinki, Finland — Pricing pressure and further weakening of the U.S. dollar decreased fourth-quarter sales in the mobile phones segment at Nokia by 6 percent, down to $7.4 billion from $7.9 billion in the year-ago three months.

Operating profit in Nokia’s mobile phone business, by far the company’s largest segment, declined 38 percent to $1.4 billion in the fourth quarter, compared with $2.2 billion year-on-year.

Nokia mobile phone unit-volume increased 19 percent in the fourth quarter, to 66.1 million units. Total market volume was estimated at 194 million units. For the 12 months, Nokia phone unit volume jumped 16 percent to 208 million units. Total market volume for the 12 months was estimated at 643 million units. The company registered volume declines in North America, and labeled the business there “disappointing.”

For the 12 months, mobile-phone segment sales slipped 12 percent to $24.2 billion, down from $27.4 billion in 2003. Operating profit for the period plunged 36 percent, with the phone business racking up $4.9 billion in 2004, compared with $7.8 billion the previous year.

Consolidated Nokia net sales for the fourth quarter rose 3 percent to $11.9 billion, up from $11.5 billion in the same quarter the previous year. Operating profit decreased 19 percent to $1.8 billion from $2.2 billion for the three months, while net profit slipped 13 percent in the fourth quarter, to $1.3 billion from $1.5 billion in the same three months in 2003. Strong phone demand during the fourth-quarter holiday selling season helped the company post a less-than-anticipated decline in quarterly profit.

For the 12 months, consolidated Nokia sales edged downward 1 percent to $38.3 billion from $38.5 billion. Operating profit was off 14 percent in 2004, down to $5.7 billion from a year-over-year $6.6 billion. Net income dropped to $4.2 billion from $4.7 billion.