Nokia Oyj, the world's biggest maker of mobile phones, reported earnings and revenue that exceeded analysts' estimates and raised its forecast for industry sales on higher demand in Russia and India.
Nokia rose as much as 9.6 percent in Helsinki trading, the most in six months, after reporting second-quarter earnings of 37 cents a share, excluding costs to cut jobs and accounting effects, and sales of 13.2 billion euros ($21 billion). Analysts had predicted 36 cents on sales of 12.8 billion euros.
Chief Executive Officer Olli-Pekka Kallasvuo said Nokia's market share increased to 40 percent during the quarter and predicted sales by all manufacturers will climb by at least 10 percent this year. Phone sales surged 42 percent in Asia on record demand from India in June. Kallasvuo said ``a lot more work'' is required in the U.S. to win market share there.
``It was very good that they upgraded their volume guidance for the whole year, that's a very strong sign,'' said Mika Heikkinen, a fund manager at Glitnir Asset Management in Helsinki, which oversees the equivalent of $4.7 billion. ``I think they can outperform the market for a while.''
Nokia rose as much as 1.52 euros to 17.28 euros and traded at 17.22 euros as of 3:48 p.m. in Helsinki. Before today Nokia shares had dropped 41 percent this year, cutting its market value to 61.8 billion euros, on concern slowing economies will crimp demand. Motorola Inc., once the industry leader and now the third-largest phone maker, has lost 56 percent in the period.
Touch-Screen Phones
Net income fell 61 percent to 1.1 billion euros, or 29 cents a share, from 2.83 billion euros, or 72 cents, a year earlier, when Nokia booked a gain from its network unit. Sales advanced 4 percent. Analysts predicted net income of 1.26 billion euros.
Kallasvuo increased Nokia's market share in 2007 with handsets costing less than $50 and pricier models with satellite navigation. The company also plans to introduce touch-screen models this year, and the first devices will aim at the ``volume market,'' Nokia executives said on a conference call.
Apple Inc. sold 1 million of its iPhones in the three days after the July 11 debut of a faster model, more than double some analysts' estimates. Kallasvuo said ``the next wave of growth'' will come from devices linked with services.
Average selling prices for phones fell to 74 euros, down from 90 euros a year earlier and 79 euros in the preceding quarter, Nokia said. Some 40 percent of that decline came from currency effects, Nokia said. About half of Nokia's sales are in dollars or linked currencies. The U.S. currency fell about 15 percent against the euro in the 12 months ending June 30.
`Great Quarter'
The company shipped 122 million devices in the quarter, an increase of 21 percent from a year earlier. Nokia had previously predicted unit sales will likely rise about 10 percent from the 1.14 billion models sold in 2007.
Unit sales of handsets in Europe, which also includes Russia, stood at 27.1 million, unchanged from a year earlier. Chinese sales gained 11 percent to 17.6 million units and Asia- Pacific, which includes India, jumped to 36.4 million. Sales in North America gained 9.8 percent.
``We are impressed with the strong performance, given the product transition,'' Bank of America analyst Tim Long said in a report. ``Great quarter all around.'' He advises investors buy Nokia shares.
In June, the company had its best month ever in India, Chief Financial Officer Richard Simonson said in an interview with Bloomberg Television today. Mobile-phone operators there are adding seven million subscribers a month, he said.
German Charge
Nokia booked a charge of 259 million euros from the closure of the German plant and 201 million euros for restructuring Nokia Siemens. The year ago period included a non-cash gain of 1.88 billion euros from and a charge of 905 million euros form job cuts. Nokia closed the factory in June to cut costs, and the company agreed on a 200 million-euro package with unions.
Gartner Inc., a Stamford, Connecticut-based researcher, forecasts the overall market will grow 10 percent to 11 percent this year, down from a previous prediction of as much as 15 percent growth.
Nokia bought Navteq Corp. for $8.1 billion to add navigation maps for mobile phones, and has teamed up with record labels to push portable music and maintain its industry lead.
Sales at Nokia Siemens rose 18 percent to 4.1 billion euros, with an operating margin of 6.7 percent of sales, excluding one- time items and accounting related issues. Analyst had predicted sales of 3.6 billion euros.
Nokia reiterated it expects the infrastructure market to be ``flat'' in euro terms this year. The company also repeated will achieve 2 billion euros in cost savings annually by the end of 2008 by cutting 15 percent of the venture's workforce.
Revenue at the Devices & Services unit fell 1 percent to 9.1 billion euros, hurt by weaker selling prices and the U.S. dollar's decline, Nokia said. Operating profit, excluding one- time items, rose 3 percent to 1.82 billion euros.
Nokia rose as much as 9.6 percent in Helsinki trading, the most in six months, after reporting second-quarter earnings of 37 cents a share, excluding costs to cut jobs and accounting effects, and sales of 13.2 billion euros ($21 billion). Analysts had predicted 36 cents on sales of 12.8 billion euros.
Chief Executive Officer Olli-Pekka Kallasvuo said Nokia's market share increased to 40 percent during the quarter and predicted sales by all manufacturers will climb by at least 10 percent this year. Phone sales surged 42 percent in Asia on record demand from India in June. Kallasvuo said ``a lot more work'' is required in the U.S. to win market share there.
``It was very good that they upgraded their volume guidance for the whole year, that's a very strong sign,'' said Mika Heikkinen, a fund manager at Glitnir Asset Management in Helsinki, which oversees the equivalent of $4.7 billion. ``I think they can outperform the market for a while.''
Nokia rose as much as 1.52 euros to 17.28 euros and traded at 17.22 euros as of 3:48 p.m. in Helsinki. Before today Nokia shares had dropped 41 percent this year, cutting its market value to 61.8 billion euros, on concern slowing economies will crimp demand. Motorola Inc., once the industry leader and now the third-largest phone maker, has lost 56 percent in the period.
Touch-Screen Phones
Net income fell 61 percent to 1.1 billion euros, or 29 cents a share, from 2.83 billion euros, or 72 cents, a year earlier, when Nokia booked a gain from its network unit. Sales advanced 4 percent. Analysts predicted net income of 1.26 billion euros.
Kallasvuo increased Nokia's market share in 2007 with handsets costing less than $50 and pricier models with satellite navigation. The company also plans to introduce touch-screen models this year, and the first devices will aim at the ``volume market,'' Nokia executives said on a conference call.
Apple Inc. sold 1 million of its iPhones in the three days after the July 11 debut of a faster model, more than double some analysts' estimates. Kallasvuo said ``the next wave of growth'' will come from devices linked with services.
Average selling prices for phones fell to 74 euros, down from 90 euros a year earlier and 79 euros in the preceding quarter, Nokia said. Some 40 percent of that decline came from currency effects, Nokia said. About half of Nokia's sales are in dollars or linked currencies. The U.S. currency fell about 15 percent against the euro in the 12 months ending June 30.
`Great Quarter'
The company shipped 122 million devices in the quarter, an increase of 21 percent from a year earlier. Nokia had previously predicted unit sales will likely rise about 10 percent from the 1.14 billion models sold in 2007.
Unit sales of handsets in Europe, which also includes Russia, stood at 27.1 million, unchanged from a year earlier. Chinese sales gained 11 percent to 17.6 million units and Asia- Pacific, which includes India, jumped to 36.4 million. Sales in North America gained 9.8 percent.
``We are impressed with the strong performance, given the product transition,'' Bank of America analyst Tim Long said in a report. ``Great quarter all around.'' He advises investors buy Nokia shares.
In June, the company had its best month ever in India, Chief Financial Officer Richard Simonson said in an interview with Bloomberg Television today. Mobile-phone operators there are adding seven million subscribers a month, he said.
German Charge
Nokia booked a charge of 259 million euros from the closure of the German plant and 201 million euros for restructuring Nokia Siemens. The year ago period included a non-cash gain of 1.88 billion euros from and a charge of 905 million euros form job cuts. Nokia closed the factory in June to cut costs, and the company agreed on a 200 million-euro package with unions.
Gartner Inc., a Stamford, Connecticut-based researcher, forecasts the overall market will grow 10 percent to 11 percent this year, down from a previous prediction of as much as 15 percent growth.
Nokia bought Navteq Corp. for $8.1 billion to add navigation maps for mobile phones, and has teamed up with record labels to push portable music and maintain its industry lead.
Sales at Nokia Siemens rose 18 percent to 4.1 billion euros, with an operating margin of 6.7 percent of sales, excluding one- time items and accounting related issues. Analyst had predicted sales of 3.6 billion euros.
Nokia reiterated it expects the infrastructure market to be ``flat'' in euro terms this year. The company also repeated will achieve 2 billion euros in cost savings annually by the end of 2008 by cutting 15 percent of the venture's workforce.
Revenue at the Devices & Services unit fell 1 percent to 9.1 billion euros, hurt by weaker selling prices and the U.S. dollar's decline, Nokia said. Operating profit, excluding one- time items, rose 3 percent to 1.82 billion euros.
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