Earnings reports

Nokia Reports Q3

ESPOO, Finland -- Third quarter 2006 highlights:
  • Nokia net sales up 20% year on year.
  • Nokia operating profit up 16% and EPS diluted up 21% year on year (excluding special items).
  • Estimated industry device volumes of 243 million units, up 6% sequentially and up 22% year on year.
  • Nokia device volumes of 88.5 million units, up 13% sequentially and up 33% year on year.
  • Nokia estimated device market share 36%, up from 34% in Q2 2006 and 33% in Q3 2005.
  • Nokia device ASP of EUR 93, down from EUR 102 in Q2 2006.
  • Networks had year on year net sales growth of 16%, faster than the market.
  • Nokia announced the acquisitions of Loudeye and gate5.
  • Nokia diluted EPS was EUR 0.21, and excluding special items was EUR 0.23.

Olli-Pekka Kallasvuo, Nokia CEO:
"Nokia delivered 20% net sales growth year on year, with excellent market share gains in our device business. We saw impressive share gains in the fast growing emerging markets, where we continued to build on our clear number one position. Catering mostly to the emerging markets, our entry-level device business performed extremely well, driven by outstanding volume growth and a solid product portfolio. The strong growth in the entry-level coupled with a lower percentage of sales in higher end products impacted our margins.

In our multimedia business, we continued to perform well, with 45% year on year net sales growth in the third quarter. In infrastructure, Networks net sales grew faster than the market and we remain focused on improving profitability. Nokia and Siemens have made good progress toward the merger of Nokia's Networks business group and Siemens' carrier-related operations and continue to expect that operations will start in January."

Industry and Nokia outlook for the fourth quarter and full year 2006
  • Nokia expects industry mobile device volumes in the fourth quarter 2006 to grow by 15% or more sequentially.
  • We expect Nokia's device market share in the fourth quarter 2006 to be approximately at the same level sequentially.
  • Sales in our networks business are expected to grow sequentially in the fourth quarter, but at a rate less than previous years.
  • Nokia expects that the mobile device market volume will be approximately 970 million units in 2006, while our estimate for 2005 was approximately 795 million units.
  • We continue to expect the device industry to experience value growth in 2006, but expect some decline in industry ASPs, primarily reflecting the increasing impact of the emerging markets and competitive factors in general.
  • Nokia continues to expect moderate growth in the mobile infrastructure market in euro terms in 2006.
  • Nokia continues to target an increase in its 2006 market share in mobile devices and infrastructure.

Nokia Corp. (NYSE: NOK)

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