Nokia Profits Jump Despite Price Pressures

Nokia says that its net profits grew by 19 percent both in the full-year 2006 and in the fourth quarter despite a price war that put pressure on margins. For the full-year, net profit rose to EUR4.3 (US$5.6) billion from EUR3.6 (US$4.7) billion in 2005, while sales were up by 20% to EUR41.1 (US$53.5) billion from EUR34.2 (US$44.5) billion. In the fourth quarter, Nokia's net profit also climbed by 19%, to EUR1.2 (US$1.6) billion.

Olli-Pekka Kallasvuo, Nokia CEO: "I am very pleased with Nokia's excellent quarterly and full year growth and performance, and I would like to personally thank the Nokia team for their great effort in making this happen. We achieved record device volumes, net sales and EPS for both the fourth quarter and full year 2006. Also, on a sequential basis profitability improved significantly, with gross margins for the quarter up in all Nokia business groups.

"Nokia was able to increase its share of the global device market significantly in 2006 to an estimated 36%, clearly solidifying our number one position in the industry. We achieved this result through the strengths of Nokia's world class brand, products, cost structure and efficiency, without sacrificing our operating margins or cash flow.

The combined mobile device volume of the Mobile Phones, Multimedia and Enterprise Solutions business groups for the fourth quarter 2006 was a record 106 million units, up 19% sequentially and 26% year on year. Overall industry volumes for the fourth quarter 2006 reached an estimated 290 million units, up 19% sequentially and year on year.

In converged devices, according to Nokia estimates, the total industry volume reached approximately 24.6 million units for the fourth quarter 2006, compared to an estimated 17.8 million units in the fourth quarter 2005. Nokia's own converged device volumes for the fourth quarter 2006 grew to 11.1 million units, compared to 9.3 million units in the fourth quarter 2005. Almost 6 million Nokia Nseries multimedia computers were shipped in the fourth quarter.

The following chart sets out, by geographic area, Nokia's mobile device volumes for the periods indicated, and provides year on year and sequential growth rates.

Nokia's estimated market share for the fourth quarter 2006 was 36%, flat sequentially and up from 34% in the fourth quarter 2005. On a sequential basis, Nokia gained market share in Europe. This gain was offset by market share declines in Latin America, North America and Asia-Pacific, while our market share in China and Middle East & Africa remained virtually unchanged sequentially. On a year on year basis, Nokia gained market share in every area except North America in the fourth quarter 2006. "

Posted to the site on 26th January 2007