Friday, April 20, 2007
Strong sales lift Nokia margin
AGENCIES in Helsinki
Nokia, the world's top mobile-telephone maker, yesterday reported strong first-quarter sales in emerging markets and a better-than-expected margin. Nokia, which sells one in three of the world's mobile telephones, has a strong lead in emerging markets which it has been fiercely defending over the past few quarters.
Its closest rival, Motorola, reported a loss for the January-March quarter, as it struggled with a plunge in handset prices while trying to hold on to market share against stiff competition from Nokia and Sony Ericsson.
Nokia's gross margin in January-March fell to 33.1 per cent from 34.1 per cent a year earlier, but rose from the fourth quarter and beat analysts' average forecast of 32 per cent. However, net income fell to ?979 million (HK$10.4 billion) from ?1.05 billion a year earlier, Nokia said.
Chief executive Olli-Pekka Kallasvuo increased the company's market share to 36 per cent in the quarter by gaining customers in China, India and elsewhere in Asia.
"The impressive profit margins Nokia achieved on average selling prices this low is a sign of strength," said Niklas Lund, a fund manager at Alandsbanken Asset Management. "The market is expecting Nokia's market share to rise even higher in the second quarter amid Motorola's recent woes."
The average selling price of a Nokia phone was unchanged at ?89 in the first quarter compared with the preceding three months and fell from ?103 a year earlier, Nokia said. That beat the average estimate of ?88 in the survey.
Analysts in a Bloomberg survey had predicted profit of ?983 million and revenue of ?10.34 billion. Nokia's operating profit as a percentage of sales fell to 12.9 per cent from 14.4 per cent a year earlier, beating the 12.5 per cent margin analysts in the survey had predicted.
The Finnish company shipped 91.1 million units during the quarter, a 21 per cent increase from a year earlier and a 14 per cent decline on the previous quarter. Unit sales jumped 43 per cent in China and 45 per cent in the Asia-Pacific region, which includes India, from a year earlier. Handset sales in Europe rose 18 per cent year on year.
Sales in North America dropped 43 per cent from a year earlier and increased 5.9 per cent from the fourth quarter. Industry unit sales would rise as much as 10 per cent this year and average selling prices would continue to decline.
Last year, growth exceeded 20 per cent as a record 978 million units were sold, Nokia said. In the second quarter, industry unit sales should rise "slightly" and Nokia would expect its markets share to be unchanged at 36 per cent.
Mr Kallasvuo forecasts there will be four billion mobile-telephone users by 2010, and that growth will come from emerging markets in the Asia-Pacific region.
Mobile-telephone replacement already accounts for 50 per cent of Nokia's sales in emerging markets and China is the biggest single market for its most expensive multimedia phones. About 12 million subscribers are added each month in China and India combined
Strong sales lift Nokia margin
AGENCIES in Helsinki
Nokia, the world's top mobile-telephone maker, yesterday reported strong first-quarter sales in emerging markets and a better-than-expected margin. Nokia, which sells one in three of the world's mobile telephones, has a strong lead in emerging markets which it has been fiercely defending over the past few quarters.
Its closest rival, Motorola, reported a loss for the January-March quarter, as it struggled with a plunge in handset prices while trying to hold on to market share against stiff competition from Nokia and Sony Ericsson.
Nokia's gross margin in January-March fell to 33.1 per cent from 34.1 per cent a year earlier, but rose from the fourth quarter and beat analysts' average forecast of 32 per cent. However, net income fell to ?979 million (HK$10.4 billion) from ?1.05 billion a year earlier, Nokia said.
Chief executive Olli-Pekka Kallasvuo increased the company's market share to 36 per cent in the quarter by gaining customers in China, India and elsewhere in Asia.
"The impressive profit margins Nokia achieved on average selling prices this low is a sign of strength," said Niklas Lund, a fund manager at Alandsbanken Asset Management. "The market is expecting Nokia's market share to rise even higher in the second quarter amid Motorola's recent woes."
The average selling price of a Nokia phone was unchanged at ?89 in the first quarter compared with the preceding three months and fell from ?103 a year earlier, Nokia said. That beat the average estimate of ?88 in the survey.
Analysts in a Bloomberg survey had predicted profit of ?983 million and revenue of ?10.34 billion. Nokia's operating profit as a percentage of sales fell to 12.9 per cent from 14.4 per cent a year earlier, beating the 12.5 per cent margin analysts in the survey had predicted.
The Finnish company shipped 91.1 million units during the quarter, a 21 per cent increase from a year earlier and a 14 per cent decline on the previous quarter. Unit sales jumped 43 per cent in China and 45 per cent in the Asia-Pacific region, which includes India, from a year earlier. Handset sales in Europe rose 18 per cent year on year.
Sales in North America dropped 43 per cent from a year earlier and increased 5.9 per cent from the fourth quarter. Industry unit sales would rise as much as 10 per cent this year and average selling prices would continue to decline.
Last year, growth exceeded 20 per cent as a record 978 million units were sold, Nokia said. In the second quarter, industry unit sales should rise "slightly" and Nokia would expect its markets share to be unchanged at 36 per cent.
Mr Kallasvuo forecasts there will be four billion mobile-telephone users by 2010, and that growth will come from emerging markets in the Asia-Pacific region.
Mobile-telephone replacement already accounts for 50 per cent of Nokia's sales in emerging markets and China is the biggest single market for its most expensive multimedia phones. About 12 million subscribers are added each month in China and India combined