Nokia Q1 Cellphone Segment Sales Jump

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Helsinki, Finland — Even with first-quarter sales declines for mobile phones in North America, overall mobile phone segment sales at Nokia jumped 11 percent to $5.9 billion from a year-ago $5.3 billion. However, segment operating profit declined 16 percent in the first three months, down to $1.1 billion, from $1.3 billion.

Unit cellphone volume in North America declined by 33 percent in the first quarter, down to 4.3-million units shipped, from 6.5 million in the same three months in 2004. Nokia reported the year-on-year decline primarily reflected operator migration from TDMA, which was a strong market for the company in the first quarter last year, to GSM and CDMA, where Nokia’s relative position is not as strong.

Nokia has revised upward its industry annual market volume forecast to about 750 million handset units this year, up from the previous 643 million units.

Operating margin in Nokia’s cellphone business declined to 19.2 percent in the first quarter, ended March 31, compared with 25.2 percent the previous year. Gross profit margin decreased to 32.8 percent in the first quarter, down from 39.6 percent year-on-year.

Nokia posted double-digit consolidated sales growth in the first quarter, hitting $9.7 billion, up from $8.3 billion in the same three months a year earlier.

Consolidated operating profit and net profit also enjoyed double-digit gains in the first three months, with operating profit increasing 10 percent to $1.5 billion from a year-ago $1.3 billion, and net income soaring 18 percent in the period, reaching $1.1 billion, compared with $954.7 million in the first quarter of 2004.

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