Nokia Beats Street
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Finnish wireless giant Nokia reported stronger-than-expected profitability for its mobile phones in the last quarter and solid overall profitability, but cut its sales forecast for the rest of 2002.
The company reported somewhat lower overall sales than the previous year but it exceeded profit targets for the quarter, reporting better profitability from its line of mobile phones.
The company reported net sales of EUR 7.014 billion (US$6.2 billion), a decrease of 12 percent compared to the same quarter last year. Its revenues from sales of mobile phones actually decreased seven percent over the previous year, but that was a relatively slight decrease compared to the 29 percent decrease in wireless network infrastructure sales.
However, its pro forma operating profit for the quarter increased to EUR 1.286 billion (US$1.286 billion), an 18.3 percent increase over the same quarter a year ago.
"Based on Nokia's preliminary research for the first quarter 2002, we believe we have at least maintained our estimated 37% share of the overall mobile phone market, in line with our long-term 40% share target," said Jorma Ollila, the company's chairman and CEO.
He noted that the network portion of the company's revenues landed precisely where the company expected and that he expected it to increase in the coming year as more wireless operators transition to next-generation wireless capabilities.
Wall Street was upset, however, because Nokia warned that overall sales would only grow between four and nine percent for 2002 compared to 2001. It previously had forecast 15 percent growth for the year."The industry remains in transition," the company said in a statement. "The speed of this transition has been slower than was anticipated earlier this year, which has led the company to revisit its annual growth outlook."
David Haskin is managing editor of sister site allNetDevices.com