Nokia, the world’s largest cellphone maker, posted today a smaller-than-expected decline in fourth-quarter net profit as strong sales in the key end-year holiday period boosted earnings, but the company said it faces competitive challenges. Net profit for the three months to Dec. 31 was EUR745 million, down from EUR948 million a year earlier but ahead of analysts’ expectations for EUR526 million.More after the break....
Analysts had expected a sharp fall in net profit as intense competition at both the premium end and low end of the handset market pressured margins at its mobile device business.
Still, sales in the fourth quarter increased, boosted by higher average selling price, which was only partially offset by lower device volumes in most regions, Nokia said. Net sales rose to EUR12.65 billion from EUR11.99 billion, beating expectations for EUR12.35 billion.
“Growth trends in the mobile devices market continue to be encouraging,” said Chief Executive Stephen Elop, but “Nokia faces some significant challenges in our competitiveness and our excecution.”
Nokia said it expects first-quarter net sales at its dominant Devices & Services segment of EUR6.8 billion-EUR7.3 billion, and a non-IFRS Devices & Services operating margin of 7%-10%.
At 1112 GMT, shares in Nokia were down 5.9% at EUR7.34, against a 0.2% drop in the wider Helsinki market.
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