Nokia rings 148pc increase in Q2 profits

2 Aug 2007

Mobile manufacturer Nokia has reported a 28pc year-on-year increase in second quarter revenues to reach €12.6bn as the company sees improved margins and boasts a 38pc share of the worldwide mobile market.

Mobile phone sales contributed €5.9bn to the bottom line, up just 1pc on last year. The biggest gains were seen in the multimedia division, which saw revenues increase 42pc to €2.6bn, while revenues in the company’s enterprise solutions division jumped 94pc to €549m.

The merger of Nokia’s networks division with its counterpart at Siemens saw the group double sales in the past 12 months, growing revenues from €1.7bn last year to €3.4bn this year.

Nokia’s net profits leaped a massive 148pc to reach €2.8bn on the back of improved margins, the sale of its Telsim division and an 11pc increase in device volumes shipped.

“Nokia continued to grow in the second quarter thanks to an excellent performance from our device businesses,” said Nokia CEO Olli-Pekka Kallasvuo. “Nokia’s share of the global device market improved to an estimated 38pc, while operating margins in our device businesses were at their highest level in three years. Diluted earnings per share was up 39pc year on year.

“Nokia now has some major hit products across what is already the industry’s broadest product portfolio. I am particularly encouraged by the success of a number of recently launched higher-end devices, which made a strong contribution to increased profitability.”

Kallasvuo said Nokia Siemens Networks had a challenging quarter. “Both net sales and margins were weak and these adverse developments require decisive action,” he said.

As a result the networks division will instigate an aggressive cost synergies programme that could yield savings of €500m.

Looking ahead to the third quarter Nokia said it is predicting device volumes to grow 10pc, resulting in an increase in global market share.

By John Kennedy