Top mobile phone maker Nokia reported quarterly earnings at the top end of estimates on Thursday thanks to strong demand for mobile phones and networks, and forecast higher sales at the start of 2004.
Nokia said it expected January-to-March sales to rise by between three and seven percent and saw earnings of 0.17 to 0.19 euro per share, compared to 0.18 euro a year ago.
Nokia has struggled to boost turnover, despite a global handset market share approaching 40 percent, as hefty unit sales were offset by weaker selling prices. Profits have been capped in recent quarters by a weak dollar and tough competition from rivals.
“Its a bit of a mixed bag,” said Deutsche Bank analyst David Hallden. “The first quarter guidance on EPS was weaker, but sales seem to be better than we expected. It is difficult to say which will outweigh the other in the end for the market.”
Nokia repeated that it saw handset market growth of over 10 percent this year. It expected the telecom networks market to be flat or slightly higher year on year in 2004, an upward tweak from previous guidance of a flat market.
The technology bellwether, which generates close to 80 percent of its revenue with its handset unit, reported fourth-quarter pro forma earnings per share of 0.29 euro. This topped the average forecast of 0.28 euro in a Reuters poll of analysts and up from 0.26 euro a year ago.
Nokia said on January 8 earnings per share would be between 0.28 and 0.29 euro, shattering its previous guidance of 0.21 to 0.23 euro thanks to strong demand for its handsets and mobile networks.
WEAKER DOLLAR HURTS SALES
But the firm’s sales were capped by the weaker U.S. dollar, which means a lower phone selling price in euro terms, as well as the harsh pricing pressure in the handset market.
Nokia said 2003 net sales slipped two percent to 29.5 billion euros, but they were up seven percent in constant currency terms.
Nokia shares were firmer after the result, up 1.2 percent to 16.46 euros and pulling the DJ Stoxx European technology index up 0.4 percent. The stock is about 20 percent higher in 2004, helped by the earnings outlook upgrade.
Nokia added that, as of the first quarter, it would no longer report pro forma earnings, which exclude the impact of goodwill amortisation and one-time items.