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Helsinki (pte021/28.01.2005/11:45) - Mobile phone giant Nokia http://www.nokia.com has reported a smaller-than-expected fall in profits and has said it is winning back market share. As the Financial Times (FT) http://www.ft.com reports, the Finnish group, which struggled early last year with gaps in its product range, has announced that it took a 34 per cent share of the global handset market in the fourth quarter double that of its nearest rival, Motorola of the US. The company has also surprised investors with the strength of its profits and its forecast for first-quarter sales. The shares rose six per cent to 11.65 euros. According to Jorma Ollila, Nokia's chief executive, the company had "accomplished a major recovery" during the second part of last year and there was a "good opportunity to strengthen our business and grow our market share in 2005".
Despite the "major recovery", fourth quarter profits and market share remained below levels achieved a year earlier. Earnings per share were 0.23 euros, compared with 0.25 euros in the same period last year, as sales rose three per cent to just over 9 billion euros. However, for the first quarter of this year, Nokia expects sales to be in the range of 7 to 7.3 billion euros, up from 6.6 billion euros in the first quarter of 2004. The company also said its global market share had increased to 34 per cent, up from 32 per cent the previous quarter, but below the 37 per cent it reached in the fourth quarter last year.
"In the fourth quarter. Nokia's record mobile device volume, together with sequentially stable average selling prices and better-than-expected infrastructure sales an profitability, pushed our net sales and earnings per share ahead of guidance," said Ollila. "Nokia's full-year 2004 mobile device market share was 32 per cent, based on an estimated market volume of 643 million units. I am pleased with our steady quarter-on-quarter market share gains during the second half. Based on an estimated 194 million units for the market, we achieved a 34 per cent share in the fourth quarter largely as a result of sequential market share gains in Asia-Pacific, China and Europe/Middle East/Africa," he added.
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