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Nokia reported almost EUR8.79 billion in Q4 sales, beating expectations and claiming more market share in its mobile phone division.
The world's number one mobile phone maker said net sales decreased five percent compared to last year to around EUR8.79 billion. Nevertheless, this figure came in ahead of analysts' expectations of sales of around EUR8.5 billion. Meanwhile, pro forma operating profit for the Finnish company, excluding EUR736 million for amortisation, goodwill impairment and restructuring, came in at around EUR1.59 billion, compared to around EUR1.73 billion the same time last year.
Profits before tax, a figure watched by the industry, came to EUR1.63 billion, well ahead of the EUR1.37 billion expected by analysts'.
Pro forma net profit was down at EUR1.15 billion, compared to EUR1.21 billion this time a year ago. Per share, the company reported pro forma earnings of EUR0.24, down EUR0.01 compared to the fourth quarter of 2000. As expected, Nokia beat its earnings per share estimates of EUR0.18 and EUR0.20.
For the full year net sales were up three percent to EUR31.91 billion, while pro forma net profits were around EUR3.79 billion, below the EUR4.03 billion the company reported a year earlier. Pro forma EPS (earnings per share) for the full year came to EUR0.79, also below last year's EUR0.84 figure. The board's proposed that dividend for the year was EUR0.27 per share.
The results drove Nokia shares up dramatically on Thursday, 6.8 percent higher in Stockholm to SEK244 at around 10:30 GMT.
Nevertheless, the seemingly good news from the mobile phone and telecommunications equipment maker follows Morgan Stanley's downgrade of Nokia stock at the start of this week. With Nokia, Ericsson and Motorola all reporting earnings this week, the broker trimmed its forecast for global mobile phone sales in 2002 by six percent to 410 million units. Morgan Stanley said it had concerns of an inventory build up in the industry at the end of the fourth quarter and cut its 2002 earnings per share estimate for Nokia by six percent to EUR0.73 and 2003 earnings per share by four percent to EUR0.81.
Whatever concerns Morgan Stanley has about the sale of mobile devices, Nokia does not seem to share them. In its results, the company said it sold 140 million mobile phones in 2001, representing about nine percent year-on-year growth. "Contrary to the market development, Nokia's sales volumes continued to grow in all geographical regions, with growth strongest in Asia Pacific," the company said. Nokia claimed its market share increased in 2001 from 32 percent at the start of the year, to around 37 percent by year's end. The company also pointed out that in 1997 Nokia's market share was a mere 19 percent.
Nokia's outlook for the worldwide mobile phone market is somewhat more bullish than Morgan Stanley's. The Finnish company says it expects a 10 percent to 15 percent growth in industry sales for 2002, representing between 420 and 440 million units shipped in the 12-month period.
"The year was characterised by intense competition, extreme volatility and a weakened global economy," said Jorma Ollila, Nokia chairman and chief executive officer, in a statement. "As we enter 2002, our strategic position is better than ever backed by a very strong brand, product range and operational ability. I am more than happy with Nokia's fourth quarter performance."
He went on to say that the company's roll out of 3G technology and devices was progressing with 3G handsets due to enter the market in the second half of 2002. Ollila also pointed to China as an area of great potential growth for the business. China is already Nokia's second largest market.
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