Nokia, the world's largest mobile phone maker, presented a mixed picture in its third-quarter financial report, with an increased volume in handset sales, but lower revenue for the period.
Nokia's pro forma net sales for the third quarter came in at €6.87 billion (A$11.55 billion) as of September 30, the last day of the period reported), a 5 per cent decline on the year-earlier quarter. On a constant currency basis, however, net sales rose 4 per cent, Nokia said. Net profit, on a pro-forma basis, fell 2 per cent to €861 million, compared to €881 million in the third quarter of last year.
The company expects revenue of Nokia Mobile Phones in the fourth quarter to be flat or slightly up year on year.
"We're talking about same level of high margins in mobile phones. It could be up, or a bit down, but basically (will be) at the same level," said Jorma Ollila, Nokia's chief executive officer in a telephone conference call.
Stagnant sales of mobile phones in Europe, the Middle East and Africa, and declining sales in Asia Pacific were just about offset by strong net sales growth in the Americas, including the U.S., the company said. A weak U.S. dollar negatively affected Nokia's bottom line, the company said. On a constant currency basis, mobile phone net sales would have grown 9 per cent year-on-year.
The popularity of lower priced entry-level mobile phones, particularly in the Americas and emerging markets such as India and Russia, are also driving down profits, Nokia said.
Mobile phone revenue was €5.62 billion (A$9.44 billion) in the third quarter, compared to €5.63 billion in the same quarter of 2002.
Nokia's share of the overall mobile phone market remained steady at 39 per cent, the same percentage reported in the second quarter of this year, but up from the 36 per cent it held in third quarter of 2002.
Nokia shipped 45.5 million handsets in the third quarter, 23 per cent more than a year earlier. It estimates industry shipments of mobile phones in the quarter grew 15 per cent year-on-year to 118 million units.
Nokia forecast overall industry volume for 2003 to be about 460 million units, with its own full-year unit volume growth expected to outpace the overall market.
Sales in Nokia Networks, the division that sells mobile phone networks to operators, were €1.22 billion, a decline of 21 per cent when compared to sales of €1.55 billion in the same quarter of last year. This was a greater loss than Nokia had predicted last month in its mid-quarter estimates.