Nokia reports drop in profit, sales

/ Source: The Associated Press

Despite an upbeat update last month that was cheered by investors and analysts alike, Nokia on Thursday reported a 20 percent drop third-quarter net profit and a fall in mobile phone sales and warned it would likely see lower sales during the fourth quarter, too.

The world's largest handset maker said its third-quarter net profit dropped to 660 million euros (US$809 million), or 0.14 euro (17 cents) a share, from 823 million euro, or 0.17 euro a share in 2003. Though the figure was down year on year, it was still greater than the range of 0.11 euro and 0.13 euro it forecast in September.

Sales for the quarter that ended Sept. 30 were 6.94 billion euros (US$8.5 billion), compared to 6.87 billion euros in the same period last year.

Mobile phone sales fell by 13 percent compared to last year, to 4.4 billion euros (US$5.4 billion), although the company claimed that its share of the global handset market grew to 33 percent.

The market, expecting a better result, was disappointed and Nokia's share remained virtually unchanged at 11.43 euros (US$14) on the Helsinki Stock Exchange in early afternoon trading.

Nokia lost market share in the United States, its biggest market, but said it made "substantial gains" in Western Europe.

Nokia, based in Espoo, just outside the Finnish capital, has sales in 130 countries with 53,000 employees.