Nokia Reports Rising Profits and Sales

Nokia reported sales and profits for the first quarter of this year which were higher than expectations. The company reported a net profit of US$1.29 billion on sales of US$11.7 billion. Nokia's first quarter 2006 operating margin was 14.4%, which was down on the 15.1% a year earlier. Total handsets volume was 75.1 million units, representing 40% year-on-year growth and a 10% sequential decline. Overall industry volume for the same period was 215 million units, representing 27% year-on-year growth and a 12% sequential decline, based on Nokia's preliminary market estimate.

Based on its preliminary market estimate, Nokia's market share for the first quarter 2006 grew to 35%, compared with 32% in the first quarter 2005. Sequential market share was also up compared with 34% in the fourth quarter 2005. Nokia's year-on-year market share increase was driven primarily by strong gains in China, North America, Latin America and Asia-Pacific, which more than offset market share declines in Middle East & Africa and in Europe. Sequential market share gains were driven by gains in Latin America, Middle East & Africa and China, partially offset by a market share decline in Europe.

Networks net sales increased 19% to US$2.1 billion, compared with US$ 1.7 billion in the first quarter 2005. Net sales increased in North America, followed by Middle East & Africa, Asia-Pacific, Latin America and China, while net sales decreased in Europe. Sales growth was clearly spurred by ongoing subscriber growth in emerging markets.

Networks first quarter operating profit decreased 33% to US$184 million, compared with US$273 million in the first quarter 2005, with an operating margin of 8.8% (15.4%). Lower profitability was driven primarily by regional mix and strong price competition.

The average number of employees during January - March 2006 was 61, 075. At March 31, 2006, Nokia employed a total of 62, 763 people (58,874 people at December 31, 2005).

 

Nokia Mobile Device Volume By Geographic Area

	(million units)
	Q12006	Q12005	YoYChange (%)	Q42005	QoQChange(%)
Europe	20.4	17.4	17	29.9	-32
Middle East & Africa	11.9	10.0	19	10.3	16
China	10.9	7.1	54	9.5	15
Asia-Pacific	16.4	10.6	55	14.8	11
North America	8.4	4.3	95	9.8	-14
Latin America	7.1	4.4	61	9.4	-24
Total	75.1	53.8	40	83.7	-10

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Posted to the site on 21st April 2006