Nokia’s Quarterly Profit Climbs 19%

By From news reports

Nokia, the world’s largest maker of cellphones, said Thursday that fourth-quarter profit rose 19 percent on increased sales in emerging markets and one-time gains.

Net income rose to 1.27 billion, or $1.65 billion, from 1.07 billion a year earlier, the company said. Earnings per share increased to 32 euro cents from 25 cents as Nokia bought back stock. Sales at the Finnish company, which makes more than one in every three phones sold globally, rose 13 percent to 11.7 billion, beating the average forecast of 11.57 billion. Forecasts ranged from 11.14 billion to 12.4 billion. Nokia sold 106 million phones in the quarter, up 19 percent on a year ago, exceeding the 100 million mark for the first time and giving it a market share of 36 percent.

Nokia said the average price of its phones fell to 89 in the three-month period covering Christmas, which compared with the analysts’ average forecast of 92 and a forecast range from 87 to 95. Nokia is fighting for market share with Motorola in China and India, the two fastest growing cellphone markets. Motorola said last week that its fourth-quarter profit plunged 48 percent. Smaller rival Sony Ericsson Mobile Communications, which focuses on the higher end of the market, last week said that profit tripled on demand for phones with music players and cameras.

Ten analysts in a Bloomberg News survey had predicted net income of 1.11 billion, or 28 cents a share, and revenue of 11.6 billion.

Nokia shares rose 77 cents, or nearly 5 percent, to 16.26, the highest since August.

The chief executive of Nokia, Olli-Pekka Kallasvuo, said that there probably would be four billion wireless subscribers by 2010 and that growth would come from emerging markets in the Asia- Pacific region. India is adding more than six million subscribers a month, while China is adding five million users.

Motorola, the world’s second-largest cellphone maker, announced plans last week to cut 3,500 jobs, or about 5 percent of its work force, to help trim costs by $400 million

Shares of Motorola fell substantially on Jan. 5 after the company said sales and profit would miss estimates as it slashed prices to compete with Nokia and Samsung Electronics, the world’s third- largest cellphone maker.

Samsung on Jan. 12 said fourth-quarter profit dropped, partly because it cut phone prices. Earnings at the telecommunications unit missed analyst estimates.

Both Nokia and Motorola introduced new models in January designed to win market share from each other. Meanwhile, Sony Ericsson has capitalized on the Walkman and Cybershot brands to win customers.

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