Nokia Sales Increased 4% in Quarter

[Kalyan]

Nokia Sales Increased 4% in Quarter

The Nokia Corporation, the cellphone maker, said on Thursday that profit fell 61 percent in the second quarter from the period a year ago, when it booked a large gain from its network joint venture with Siemens.

In an earnings report that came in above expectations, Nokia slightly upgraded its forecast for the cellphone market in 2008, and said it expected to keep gaining in market share.

Four in 10 cellphones sold worldwide are now made by Nokia.

Profit was $1.75 billion, or 46 cents a share, down from $4.49 billion, or $1.14 a share, a year earlier. Sales rose 4 percent, to $20.87 billion.

The 2007 second-quarter result included a $2.98 billion gain from the formation of Nokia Siemens Networks, a joint venture with Siemens of Germany.

Excluding special items, Nokia said its profit rose 8 percent, to $2.18 billion.

Analysts expected earnings of 56 cents a share on $20.05 billion in revenue, on average, according to Thomson Financial.

"Nokia's profitability was a nice surprise," Michael Schroeder, an analyst at Glitnir Bank, said, adding that profit margins in the cellphone and the network divisions were higher than expected.

The company said its share of the global market for handsets rose to 40 percent, from 38 percent in the second quarter of 2007. It also upgraded its forecast for the global handset market, saying mobile device volumes could rise more than its previous estimate of 10 percent.

"Looking at the rest of the year, we are optimistic and have had good feedback about the broad range of new products we expect to sell in our device business," the chief executive, Olli-Pekka Kallasvuo, said in a statement.

However, the closely watched average selling price of Nokia phones continued to fall because of higher volumes of cheaper phones sold in emerging markets and the weak dollar, Nokia said.

The average price for a Nokia handset was $117, down from $125 in the first quarter of the year and $143 in the second quarter of 2007.

In terms of volume, the company had its biggest sales growth in Asia, Latin America, the Middle East and Africa. Sales of Nokia phones were up 10 percent in North America and flat in Europe.