Nokia’s profit and revenue better than expected — MobileMonday Global: Industry News

^{Operating margins down 2.2 percentage points} Nokia’s profit and revenue better than expected

27 Jan 2005 at 17:55 GMT Timo Poropudas

Nokia’ shares surged 6 percent Thursday after the company reported a fourth-quarter profit decline that wasn’t as sharp as analysts had forecast. The stock price climb was aided by Nokia’s announcement to buy back as much as 5 billion euros’ worth of stock.

Nokia said quarterly net income fell to 1.02 billion euros, or 23 eurocents a share, from 1.17 billion euros, or 25 European cents. Sales rose to 9.01 billion euros, up 3 percent.

The mobile-phone maker beat analysts’ consensus expectations of 19 eurocents. Analysts had estimated revenue at between 8.4 billion and 8.5 billion euros.

Over 2004 as a whole, Nokia’s sales slipped 1 percent to 29.3 billion euros and mobile-phone net sales fell 12 percent, or 5 percent at constant currencies, to 18.5 billion euros.

Nokia said operating margins narrowed to 14.8 percent from 17 percent in the fourth quarter last year.

33 cent dividend

Nokia will propose paying a dividend of 33 eurocents per share at its annual meeting, compared to a dividend of 30 euro cents last year.

Nokia forecast an 8.3 percent rise in sales in the first quarter to a range of 7 billion to 7.3 billion euros, in line with expectations.

Nokia repeated its prediction that the mobile-device market to grow about 10 percent in volume from an estimated 643 million units in 2004. Value growth will be less.

“This was a year of record-breaking mobile device volumes for our industry, which drove both the device and infrastructure markets forward,” said Jorma Ollila, chairman and CEO of Nokia.

In the fourth quarter, Nokia said mobile device volumes jumped 19 percent to a record 66.1 million units, giving Nokia a mobile-phone market share of 34 percent.

Mobile-phone sales fell 6 percent to 5.7 billion euros.

Networks up by billion euros

Multimedia net sales increased 46 percent to EUR 3 659 million (EUR 2 504 million), with EUR 179 million operating profit (EUR 186 million operating loss) and operating margin of 4.9 percent (-7.4 percent).

Enterprise Solutions net sales increased 57 percent to EUR 830 million (EUR 529 million), with EUR 199 million operating loss (EUR 141 million operating loss) and operating margin of - 24.0 percent (-26.7 percent).

Networks net sales increased 13 percent to EUR 6 367 million (EUR 5 620 million), up 21 percent at constant currency. Operating profit was EUR 878 million (EUR 219 million operating loss) and operating margin 13.8 percent (-3.9 percent).