Thursday, August 02, 2007

WSJ: Nokia's Net More than Doubles On Strong Sales, Bigger Market Share

Motorola's losses are Nokia's gains.... From this morning's WSJ:

By DANIEL THOMASAugust 2, 2007 7:43 a.m.

LONDON -- Nokia Corp. Thursday said second-quarter net income more than doubled, surprising investors, as the world's largest mobile-phone maker took a 38% share of the global phone market.

The Finland-based telecommunications equipment saw mobile-phone shipments jump 29% to 100.8 million, resulting from a push into high-volume markets, such as India and China. Rival Motorola Inc.'s recent woes are also believed to have helped Nokia gain market share. Earlier this month, Motorola posted a second-quarter net loss and a huge slide in sales.

Nokia lifted the average selling price of its devices sequentially to €90 from €89, as it introduced a number of high-end phones, including the Nokia N95 multimedia device. Average selling prices fell 11% from €102.

The mobile-phone maker said net profit for the three months ended June 30 increased to €2.83 billion, or 72 European cents a share, from €1.14 billion, 28 cents a share, a year earlier.
Excluding special items earnings per share came in at €0.32, still ahead of analyst expectations. The quarter included a €1.88 billion nontaxable gain from the creation of its joint-venture with Siemens AG.

Revenue increased 28.3% to €12.59 billion from €9.81 billion. Analysts, who predicted that Nokia would report lower profits as a result of its push into lower-priced emerging markets and costs related to the setting up of its Nokia Siemens Networks joint-venture, had expected net profit of €1.06 billion, or 28 cents a share, on revenue of about €12.91 billion.

"Nokia continued to grow in the second quarter thanks to an excellent performance from our device businesses. Nokia's share of the global device market improved to an estimated 38%, while operating margins in our device businesses were at their highest level in three years," Chief Executive Olli-Pekka Kallasvuo said, adding that he expects the mobile device market to grow by 10% or more in 2007 to around 1.075 billion.

But Mr. Kallasvuo said its Nokia Siemens Networks joint venture had faced a challenging quarter, with net sales and margins both weak. The company said it would be "accelerating and increasing" the company's cost-savings targets as a result. Nokia Siemens Networks now plans to target annual cost savings of €1.5 billion by the end of 2008, rather than 2010.

Shares of Nokia were 7% higher in European trading at €22.08.

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