Nokia sees across-board drop but shares jump 5 per cent
Beats expectations, says future looks rosy
Nokia has seen across-the-board drops in its third quarter results but beaten expectations and been awarded with a five per cent share price increase this morning.
Sales were down nearly seven per cent to £4.42 billion; pre-tax profit down 21.8 per cent to £670 million; net profit down 17.7 per cent to £477 million; and operating profit down 20.8 per cent to £670 million. However shares rocketed on the news, coming down just as fast to settle around 1400p (4.5 to 5.0 per cent up).
Nokia spent the week telling journalists and investors that the mobile phone industry was going to take off again next summer what with new phones, better, faster infrastructures and upgrades in technology - so when the results beat expectations, its shares took off.
It's been a tough year for mobile manufacturers, prompting profit warnings and a complete readjustment of the market as companies switch to a tecnhology licensing model.
As the clear leader in the market, Nokia has suffered less than most, and with it looking upbeat about the next year - sales up 20 per cent it reckons next quarter - we should see mobile stocks on the increase again. We say this of course at the same time as Ericsson shares have fallen five per cent.
The company pointed out that the shift to new mobile protocols and the state of the economy at the moment had caused postponement of network investment, but that it would pick up again soon.
Chief exec Jorma Ollila said: "Nokia, as a flexible, lean and focused organisation has done more than just weather the storm of the past several months. We succeeded in sustaining solid profitability and high cumulative operating cash flow of EUR 3.9 billion for the first nine months in an intensely competitive and volatile environment." ®