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Nokia Q3 U.S. Phone Dollar Sales Flat

Helsinki, Finland – Strong net-dollar sales growth in the Americas during the third quarter helped Nokia’s mobile phone segment virtually break even, with flat sales of $6.54 billion in the three months, compared with $6.56 billion in the year-ago period.

While unit sales of mobile phones rose 23 percent at Nokia overall, to 45.5 million units, dollar sales were adversely affected by the weak U.S. dollar, as well as an increased proportion of entry-level phones across all sales regions. Global phone-market unit volume climbed 15 percent year-on-year in the third quarter, hitting 118 million units, said Nokia. The 12-month industry volume for 2003 now is expected to reach 460 million units, according to the company.

Operating profit for the Nokia mobile phone segment edged upward in the third quarter, reaching $1.46 billion, from $1.45 billion in the same three months in 2002. Mobile phone operating margin increased 20 basis points, to 22.4 percent in the period. Profitability was largely driven by Nokia’s continued strong product competitiveness and operational efficiency, the company said.

Consolidated Nokia third quarter sales dropped 5 percent, to $8 billion, down from $8.5 billion in the same quarter last year. Operating profit dipped 2 percent for the period, down to $1.39 billion, from $1.42 billion year over year, as a tough competitive environment and weak dollar influenced earnings. Net profit also declined 2 percent in the third quarter, to $1 billion, compared with $1.03 billion a year ago. Operating margin gained 40 basis points, to 17.3 percent.

For the nine months, mobile phone-segment sales edged upward 1 percent, hitting $19.33 billion, compared with $19.17 billion in the same time frame the previous year. Operating profit for the segment rose to $4.5 billion, from $4.2 billion year-on-year. Operating margin increased 110 basis points, to 23.1 percent.

Nokia’s consolidated nine months sales dropped 2 percent, to $24 billion, from $24.6 in the year-ago period. Net profit decreased 12 percent, to $2.8 billion, from $3.1 billion. Operating margin was off 210 basis points, to 15.7 percent.

In the fourth quarter, net dollar sales for Nokia’s mobile phone business is expected to be flat or slightly up year over year, hard hit by a major depreciation of the U.S. dollar, compared with the same period in 2002. Profitability for the mobile phone segment in the period is expected to continue to be strong.