US consumers pump up Nokia profits
Bullish forecast for '06
Nokia, the world’s biggest mobile phone maker, announced stronger than expected results for Q1 yesterday.
Profits plumped up 21 per cent based largely on increasing sales in the US market. Net income for the first quarter soared to €1bn compared to €863m in 2005. Revenue at the Espoo, Finland-based company jumped 29 per cent to €9.5bn, up from €7.4 bn in the year-ago quarter.
Emerging markets in the Middle East and Africa, the Asia-Pacific region, and China also performed well with quarter-on-quarter per centage growth all in the teens. Of the newer markets only Latin America performed poorly for Nokia with volumes down by just under a quarter.
Earnings per share jumped nearly a third to €0.25, outperforming the Wall Street consensus forecast of €0.22.
Nokia president Olli-Pekka Kallasvuo said 2006 will be a year of good growth for the global mobile market. He expects Nokia's market volume to increase by at least 15 per cent.
"This year we anticipate approximately 70 per cent of industry volume growth to come from the emerging markets," he said, adding that lower priced entry-level products were "critical" for Nokia's future success.
Nokia phones are getting more expensive. The average selling price of a handset before Christmas was €99, rising slightly to €103 for the current quarter.
The firm's network business also seems healthy, with new contracts announced this quarter in Kuwait, China, Ecuador, Ukraine, Finland, Spain, and a United Arab Emirates deal alone worth €190m.
Nokia chief executive Jorma Ollila reportedly said he believed the recent merger with Lucent and Alcatel will not affect Nokia's market share.
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