Mixed bag for Nokia

22 Jul 2005

Finnish network vendor and handset manufacturer Nokia has announced second quarter revenues of EUR8.1 billion(USD10 billion) for the period ended 30 June 2005, up 25% on the corresponding period last year. Despite sales being at the upper end of analyst expectations, net income was lower than forecasted, albeit up 15% year-on-year at EUR799 million. However, weak sales and earnings guidance for the third quarter cast a shadow over the results, with shares down by almost 10% in early trading on Thursday. Moreover, the average price of a Nokia handset slipped from EUR110 in the first three months of 2005 to EUR105 in the second quarter. That trend is likely to continue, as although the company recently upped its 2005 total handset sales forecast from 720 million to 740 million, it expects much of this growth to come from emerging markets where lower priced phones dominate. More encouragingly, according to its own estimates Nokia’s share of the handset market stood at 33% at the end of June 2005, compared with 30% twelve months previously.