Thursday, July 17, 2008

Nokia market share up in second quarter, positive outlook

Nokia, the world's leading mobile phone maker, reported on Thursday an 8.0-percent rise in underlying second-quarter net profit and its shares soared 9.0-percent despite a heavy hit for closing its Bochum plant in Germany.

Nokia also announced that its market share had risen to 40 percent.

Net profit for the April-June period, excluding one-off items, rose 8.0 percent to 1.37 billion euros (2.17 billion dollars) from the same quarter a year ago, while sales grew four percent to 13.15 billion euros, the company said in a statement.

Including one-off items net profit was down by 61 percent to 1.1 billion euros from 2.8 billion a year earlier. The non-recurring items included 259 million euros linked to the closure of the Bochum plant.

Operating profit in the second quarter, excluding one-offs, rose meanwhile by 39 percent to 1.93 billion euros.

In April-June the Finnish company sold 122 million mobile phones and its market share rose to 40 percent, compared to 38 percent a year ago, and up from 39 percent in the first quarter of 2008.

The group's biggest market is now the Asia-Pacific region, where it sold 36.4 million phones, a rise of 42.2 percent from a year ago and ahead of Europe where it sold 27.1 million handsets.

"Looking at the rest of the year, we are optimistic and have had good feedback about the broad range of new products we expect to sell in our device business,"

Nokia's chief executive Olli-Pekka Kallasvuo said in the earnings statement.

Nokia said it expected its market share in the third quarter to stay on the same level as in April-June, while it continued to target higher market share for 2008.

Analyst Jari Honko from eQ Bank told AFP strong sales volumes indicated the global economic turmoil had not stopped people from buying new cell phones.

Nokia upgraded its forecast for the mobile device industry's annual sales growth and said it saw sales increasing more than 10 percent.

"Many research institutes have cut their forecasts, but Nokia is hiking its estimates. It is a positive signal on mobile phone markets,"

Pohjola Bank analyst Hannu Rauhala said.

The company saw its average selling price for handsets continue to fall. In April-June its phones on average sold for 74 euros each, down from 79 euros in the first quarter.

Analysts said the figure was a slight disappointment, which could partly be explained by the weakening dollar.

After the results were released, Nokia shares were up almost 9.0 percent to 17.17 euros on the Helsinki stock market, which was 3.8 percent higher.