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Nokia’s results a ‘sigh of relief’

ESPOO, Finland—Nokia Corp. reported a mixed bag of third-quarter results that may reflect the “re-grouping” nature of the traditionally slow quarter as the business gears toward the lucrative final quarter of the year. One analyst called it a “sigh of relief” quarter for the Finnish giant, as some had feared lower results.

The vendor’s overall third-quarter net profit reached nearly $1.1 billion, a 4-percent drop from the year-ago quarter, on $12.8 billion in revenue. Revenue was up 20 percent from the year-ago quarter’s $10.6 billion.

Mobile handsets, Nokia’s bread-and-butter, brought in $10.1 billion of the company’s $12.8 billion in revenue, up from the $8.4 billion in the year-ago quarter.

Nokia, however, breaks out its handset numbers into two categories: “Mobile phones” garnered revenue of $7.5 billion, up 14 percent compared with the year-ago quarter, and “multimedia devices”—essentially smart phones—brought in $2.6 billion, a 45-percent jump over the year-ago quarter. Average selling prices were about $117, down slightly from the previous quarter, perhaps a reflection of higher sales of low-end phones in emerging markets, where Nokia leads its competitors. Operating margins in “mobile phones” dropped to 13 percent from 17 percent, while for “multimedia devices” those margins improved slightly to 17.5 percent.

Nokia shipped a total of 88.5 million handsets in the quarter, a 33-percent increase from the year-ago quarter—well ahead of the vendor’s own calculation of 22 percent year-on-year growth for the industry as a whole.

American Technology Research analyst Albert Lin said in a note to investors that the positive aspect of Nokia’s number came in the 33 percent year-on-year jump in handset shipments. Disappointing news, according to Lin, included the drop in operating margins for handsets.

Networks, the Finnish vendor’s second-largest unit, brought in $2.3 billion in revenue, a 16-percent rise over the year-ago quarter. Enterprise solutions earned $325 million in revenue.

In its outlook for the fourth quarter, Nokia projected that it would maintain its current market share and that total industry handset shipments would reach 970 million, including an implied handset shipment volume for Nokia of 102 million units.

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