Networks Rescues Nokia

Growth at Nokia Corp.'s (NYSE: NOK) Networks division continues to keep company net sales afloat, with the Finnish vendor today predicting healthy times ahead for the cellular infrastructure market.

In its third-quarter results, the company reported net sales of €6.94 billion ($8.6 billion), a 1 percent increase year-over-year.

This small improvement was largely thanks to a 21 percent growth in network sales to €1.47 billion ($1.82 billion), generating operating profit of €181 million ($224 million).

In contrast, net sales of its Mobile Phones division fell 13 percent year-over-year to €4.4 billion ($5.4 billion). Operating profit in this division fell 44 percent to €822 million ($1.02 billion).

Nokia's third-quarter earnings fell to €0.14 ($0.17) per share, above the average market forecast of €0.13 ($0.16) but down on the €0.17 ($0.21) per share booked in the same period last year. Total company operating profit decreased 20 percent year-over-year to €928 million ($1.1 billion).

In light of its handset troubles, CEO Jorma Ollila was naturally keen to talk up the Networks division's turnaround in recent quarters.

"We have today supplied W-CDMA technology to 24 of the 50 commercially launched W-CDMA 3G networks in the world," he told analysts in a conference call. "We are also building out presence in several new countries where we have won contracts."

Looking ahead, Ollila expects the infrastructure market to continue its upward trajectory. "The overall mobile infrastructure market is developing slightly better than previously expected, and Nokia now expects slight to moderate growth for the overall market in 2004 compared to last year in euro terms."

Nokia shares had risen 1.38 percent to €11.57 ($14.31) per share at press time.

— Justin Springham, Senior Editor, Europe, Unstrung

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