Nokia Raises Market Outlook After 3Q Profit Jump
STOCKHOLM -(Dow Jones)- Nokia Corp. (NOK) Thursday raised its forecast for the global handset market after third-quarter earnings were boosted by rising demand for phones with cameras and music players and growth in emerging markets.
The world's largest mobile phone maker said it expects the market to total 780 million units in 2005, up from its previous estimate of 760 million. Nokia aims to lift its market share in the fourth quarter, but said that average selling prices will fall from the previous quarter as growth stems mainly from markets where low-end phones predominate.
Earnings per share rose to EUR0.20 in the third quarter from EUR0.15 a year earlier, while sales gained 18% to EUR8.4 billion, in line with the upgraded guidance given by the Finnish company in September.
Operating profit advanced 19% to EUR1.15 billion in the quarter, driven by the multimedia division, which more than doubled earnings to EUR245 million. The multimedia arm has enjoyed particular success with the 6680 model, a third-generation camera phone that incorporates a music player.
After market share, sales and profit fell in 2004, Nokia has recovered by revamping its product range in a revival that has come mainly at the expense of smaller rivals. The top three handset manufacturers - Nokia, Motorola Inc. (MOT) and Samsung Electronics Co. Ltd. (005930.SE) - have thrived in a buoyant market, with demand fueled by replacement sales in Europe and growth in developing regions like China.
"Profitability was driven by an excellent performance from our device businesses," Chief Executive Jorma Ollila said in a statement. "This was backed by growing strength in our product portfolio and our ability to manage costs and execute well."
Nokia sold 66.6 million mobile phones in the third quarter and claimed a market share of 33% in a total market of 199 million units sold, according to the company's estimate.
The shares fell in the wake of the announcement, and were trading down EUR0.22, or 1.6%, at EUR13.81 at 1015 GMT. The overall market was up.
Company Web site: http://www.nokia.com
-By Magnus Hansson, Dow Jones Newswires;+46 8 545 130 91, magnus.hansson@dowjones.com
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Posted to the site on 20th October 2005