Nokia's net income rises 29 percent for third quarter

Nokia Corp. reported a 29 percent jump in net income for the third quarter, and an 18 percent rise in sales compared to a year earlier, driven by strong performance in its mobile phone handset business.

Net income for the quarter totaled €881 million (US$1.061 billion as of Sept. 30, the last day of the period reported), up from €685 million a year earlier, while sales totalled €8.4 billion, up from €7.1 billion. To make year-earlier figures directly comparable with those for the current quarter, Nokia restated year-earlier figures to comply with new International Financial Reporting Standards.

The company sold 29 percent more mobile devices in the quarter than it did a year earlier, for a total of 66.6 million units. Of these, 32.2 million were in Europe, the Middle East and Africa, 8.5 million in China, 12.6 million in the rest of the Asia-Pacific region, 5.8 million in North America and 7.5 million in Latin America.

Selling prices for mobile phones continue to decline. Nokia's average selling price in the third quarter was €102, down from €105 a quarter earlier and €108 a year earlier. The decline is at least in part due to the role played by emerging markets in Nokia's sales mix, where low-cost phones are more popular, the company said.

Nokia shipped 7.1 million smart phones in the quarter, a little over half its estimate of the worldwide total of 14 million devices. Its share is slipping as the category takes off: in the third quarter of 2004, it sold 2.9 million smart phones in a market it estimated at 5.2 million.

Strong sales of mobile devices prompted Nokia to revise its estimate of the size of the overall market for the year. It now expects the industry to sell 780 million mobile devices this year, up from its previous estimate of 760 million. It estimated the total market size in 2004 at 643 million units.

The company expects to grow faster than the market in the fourth quarter, increasing its market share above the current level, which it estimates at 33 percent.

It expects volume growth will be dominated by North America and Latin America, where low-cost devices are more popular, pushing average selling prices down further.

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