Nokia Q4 sales jump but profits unmoved
Price erosion continues
Mobile phone average selling prices are in decline, Nokia warned today as it reported its Q4 FY2005 financial results.
Sales for the period hit €10.33bn ($12.68bn), nine per cent higher than the year-ago quarter's €9.46bn. The mobile phone giant sold €6.22bn ($7.64bn) worth of handsets in the quarter, up just six per cent on Q4 FY2004's total, €5.87bn ($7.21bn).
Nokia's net income was €1.07bn ($1.31bn), down a single percentage point from the year-ago quarter. Then, the company made €1.08bn ($1.33bn) in net profit. By contrast, earnings were up year on year, from 24 cents a share to 25. Nokia said it will spend €6.5bn ($8bn) this year buying back stock, raising the prospect that earnings will continue to rise.
ASPs, on the other hand, will continue to fall, Nokia said. In Q4, they dropped to €99 ($122) from €102 ($125) in Q3 and €111 ($136) in Q4 FY2004. Analysts had forecast a Q4 FY2005 ASP of €100 ($123). The ongoing ASP decline will be "primarily driven by a mix shift in our volumes to markets where low-end models predominate", Nokia said, and "consistent with the industry trend, specifically the strong volume growth in emerging markets".
For FY2005 as a whole, Nokia reported income of €3.62bn ($4.44bn) on sales of €34.19bn ($41.98). Those figures amounted to increases of 13 per cent and 16 per cent, respectively, on FY2004's totals.
The phone division reported annual sales of €20.81bn ($25.55bn), 12 per cent higher than the €18.52bn ($22.74bn) Nokia announced this time last year. ®