Asia Lifts Nokia’s Sales 17 Per Cent to GBP 5bn

NOKIA yesterday gave the mobile phone sector a much-needed boost after it revealed forecast-beating first-quarter profits thanks to booming Asian demand.

Shares in the Finnish group jumped 6 per cent on hopes that the world’s largest handset maker was back on the growth track after it gave ground to rivals in 2004 due to gaps in its product range.

Nokia posted earnings of E0.19 per share in the quarter against E0.16 a year ago, exceeding all estimates in a Reuters poll of 27 analysts.

Sales rose 17 per cent to E7.4 billion (GBP 5bn) as the handset giant shipped more than 54 million phones – 20 per cent more than last year – helped by demand in China. The sales boost also helped Nokia recover some of its lead over its main rival, Motorola, which increased shipments by just 13 per cent.

Nokia’s efforts to revamp its line-up with more flip phones were starting to pay off, analysts said, even though its market share narrowed slightly to 32 per cent.

“Certainly we are more confident. We have seen quarter one happen, and it was better than we expected,” chief executive Jorma Ollila said, but admitted that handset volume declines in both North and Latin America were disappointing.

Nokia, which makes one in every three phones sold around the world, also said the global market would grow by around 15 per cent to 740 million units, much more bullish than third-placed rival Samsung Electronics which forecast growth of 10 per cent to 700 million units.

“The underlying market is continuing to be stronger than what they and we have expected,” said Richard Windsor from Nomura.

Nokia said it expected second-quarter sales at between E7.9bn and E8.2bn against E6.64bn a year ago. The forecast beats all market forecasts, in which the highest estimate was for E7.77bn.