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Nokia net profit drops for first time in five years

Nokia net profit drops for first time in five years

Nokia missed its own sales forecast for the second quarter, lowered last month. The company posted a pro forma net profit Thursday of 830 million euros ($US710 million), down 16 per cent from the 984 million euros reported in the second quarter of 2000. It's the company's first decline in five years.

Net sales for the three months amounted to 7.35 billion euros, a 5 per cent increase over the 6.98 billion euros for the same period last year, Nokia said in a statement. In its June 12 revised outlook Nokia said it expected year-on-year sales growth to be "somewhat below 10 per cent," compared with its earlier estimate of 20 per cent.

Diluted pro forma earnings per share were 0.17 euros, equivalent to $0.15, meeting the consensus estimate of 20 analysts polled by Earnings.com.

Sales at Nokia Mobile Phones, the company's handset division, grew 10 per cent to 5.35 billion euros in the second quarter of 2001 from 4.88 billion euros last year. Sales at Nokia Networks, the unit that sells mobile phone networks, declined 2 per cent and came in at 1.9 billion euros, compared to 1.93 billion euros in the second quarter of 2000.

The company said it doesn't believe the market will pick up again until next year. Earlier Nokia had said it expected a revival of the market in the second half of 2001.

For the third quarter Nokia expects revenue growth to be flat to 5 per cent. The company isn't giving guidance for the fourth quarter, due to the "lack of visibility." For the full year Nokia said it estimates the global mobile phone market to show very little to modest volume growth compared to 2000, when about 405 million handsets were sold.


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