A Whopping 437.1 million devices shipped in 2007
ESPOO, Finland (AP) — Nokia Corp. shares jumped 12 percent Thursday as the world’s top mobile-phone maker reported record profits and growth in the fourth quarter, selling more handsets than its three closest rivals combined.
Strong sales in emerging markets helped boost net profit 44 percent in the period and saw the Finnish company capture more than 40 percent of the global handset market — an all-time best and long-term goal.
Nokia said net profit in October through December was 1.8 billion euros ($2.6 billion), up from 1.3 billion euros in the same period in 2006. Revenue grew 34 percent to 15.7 billion euros ($22.9 billion) as Nokia sold a record 133.5 million handsets — up 27 percent on the same period in 2006.
Nokia said it expects to increase market share in 2008, but gave no estimates.
Nokia’s U.S.-listed shares rose $4.05, or 12 percent, to $36.48.
Chief Executive Olli-Pekka Kallasvuo described the quarter as “excellent.”
“Mobile phones are a necessity for a growing number of people worldwide,” he told reporters. “In this sense, the market is everywhere.”
The company said it expects the cell-phone market to grow some 10 percent globally in 2008, but warned that January through March would see a slight decline from the last quarter of 2007.
It also cautioned that the average selling price of Nokia devices — a much-watched indicator by markets — was down at 83 euros ($120) from 89 euros in the same period in 2006. It said that it expects “some decline” in prices in 2008.
Nokia “has been able to concentrate on the big growth areas of the emerging markets,” said Pasi Vaisanen, an equity analyst at Glitnir Bank. “Its superiority in logistics and processes is so great, it doesn’t seem to get anything wrong.”
Nokia’s strong performance was in stark contrast to that of many of its rivals.
Motorola Inc.’s shares plunged more than 23 percent Wednesday after new CEO Greg Brown said the recovery of its ailing handset division will take longer than expected. The U.S.-based handset maker, which last year lost the No. 2 spot to South Korea’s Samsung Electronics Co., said net profit fell 84 percent in the fourth quarter and mobile phone sales were down 38 percent.
Research firm Strategy Analytics also estimated that Nokia’s market share had reached 40 percent, compared to Samsung’s 14 percent. It put Motorola at 12 percent — its lowest level since 2001.
Sony Ericsson and LG Electronics rounded out the top five with 9 percent and 7 percent market shares, respectively.
“We see Nokia, Samsung and LG going up (in 2008), Sony Ericsson flat, and Motorola flat to down,” said Neil Mawston of Strategy Analytics. “The product portfolios of Nokia and Samsung have improved considerably in the last year. Motorola have quite a bit of catching up to do.”
Last week, Samsung said it sold a 46.3 million mobile phone handsets, a quarterly record, pushing total sales for 2007 to more than 161 million. Sony Ericsson said net profit fell 17 percent in the fourth quarter due to higher costs and taxes.
Nokia said its biggest growth in the period — of 52 percent — was in the Middle East and Africa, followed by 43 percent in the Asia-Pacific region and 38 percent in China.
In Europe, Nokia handsets sold 12 percent more than in the final quarter of 2006. Sales slumped in North America, down 7 percent on the previous year.
Total profits in 2007 reached 7.2 billion euros ($10.6 billion), up 67 percent from the year before, while sales jumped 24 percent to 51 billion euros ($74.8 billion), Nokia said. It sold 437 million handsets last year, 26 percent more than in 2006.
At a news conference, Kallasvuo apologized for the company’s decision to close a mobile-phone factory in Bochum, Germany, but said it was necessary.
He said the Bochum plant makes 6 percent of Nokia’s handsets, but accounts for 23 percent of the company’s labor costs.
Politicians, employees and local residents have protested plans to close the plant in the industrial Ruhr region, with the likely loss of 2,300 jobs. About 15,000 people demonstrated against the closure on Tuesday.
Nokia has sales in 130 countries and employs 112,000 people worldwide.
[Via Yahoo Biz]