Nokia Sales Fall

Nokia has reported that its third quarter sales fell by 5% to just over US$8 billion, compared to a year ago. The fall was mainly attributed to currency fluctuations. The company says that on a constant currency basis, group net sales would have been up 4% year on year.

Mobile phone net sales in the third quarter were flat year on year, in line with guidance, reaching US$6.5 billion. Strong net sales growth in the Americas, including the US, was virtually offset by flat sales in the Europe/Middle East/Africa region and lower sales in Asia Pacific. While mobile phone volumes grew by 23%, sales were adversely affected by a weak US dollar. On a constant currency basis, mobile phone net sales would have grown 9% year on year. Sales were also affected by an increased proportion of entry-level phone sales across all regions, with the Americas and emerging markets such as India and Russia, where entry-level phones predominate, accounting for an increased share of Nokia's sales volumes.

Nokia grew its overall mobile phone market share year on year from 36% to 39%, maintaining its share at the second quarter, 2003 level.

Net sales in Nokia Networks were US$ 1.4 billion, down by 21%. On a constant currency basis, net sales would have decreased by 13% year on year. While sales grew slightly in the Americas, they were more than offset by lower sales in Europe and Asia Pacific, compared with the third quarter 2002.

Third-quarter pro forma operating profit for the Nokia group declined by 2% year on year to US$1.28 billion. Pro forma net profit for the group also declined by 2% year on year to US$1 billion.

Nokia says that net sales of Nokia Mobile Phones in the fourth quarter are expected to be flat or slightly up year on year, muted by a major depreciation of the US dollar, compared with the same period in 2002. Profitability at Nokia Mobile Phones is expected to continue to be strong.

In the overall mobile phone industry, Nokia estimates fourth-quarter, year-on-year industry volume growth to be in the mid teens, with Nokia's own volumes clearly growing faster than the market. For the full year 2003, Nokia now expects overall industry volume to be about 460 million units. The company's own full-year unit volume growth is estimated to outpace that of the market.

Nokia continues to expect the overall network infrastructure market to decline by 15% or more for the full year 2003."

Posted to the site on 17th October 2003