ESPOO, Finland—Nokia Corp. reported today that its net profit in the first quarter rose 21 percent to $1.3 billion over the year-ago quarter—exceeding analysts’ expectations—on the strength of more than 75 million handsets shipped.
Like its next-largest rival, Motorola Inc., Nokia’s overall profits were constrained by its network infrastructure and enterprise divisions, where revenue declined and losses grew, respectively. Unlike Motorola, where overall profits declined from the year-ago quarter, Nokia’s strength in handset sales and profits were enough to give the company a solid boost in overall earnings and its Helsinki-listed shares traded up more than 6 percent following the news.
Nokia said that its global market share rose 3 percent over the year-ago quarter to 35 percent. Nokia and Motorola both gained significant market share in the first quarter to claim a total of 56 percent global market share, further squeezing the remaining market share open to other handset vendors.
Nokia’s two handset divisions—mobile phones and multimedia handsets—taken together earned operating profits of $1.7 billion, up from $1.26 billion in the year-ago quarter, based on volume sales of handsets in developing markets as well as a broadened portfolio of camera phones and music phones. In contrast, Nokia’s network equipment division reflected a drop in earnings to $184 million from $272 million in the year-ago quarter, and its enterprise solutions division’s losses increased to $81 million from $11 million in the year-ago quarter.
Nokia’s greatest gains in mobile device shipments came in the closely watched North American market, where it trails Motorola; there the Finnish vendor shipped 8.4 million units, a massive 95-percent increase over the year-ago quarter’s shipments of 4.3 million units. Nokia also made solid gains in volume shipments of 50 percent or more in the rapidly growing markets in Latin America, Asia-Pacific region and China. Its market share in Europe, where it dominates, declined, according to Nokia.
