Nokia sales and profits up

25 Jan 2007

Nokia, the world’s biggest mobile phone maker, has reported a rise in sales and profits during 2006, along with record volumes of handsets shipped.

Announcing its fourth-quarter and final-year figures this morning, the Finnish company revealed total annual revenues of €41.1bn – a rise of 20pc. Sales for the final three months of the year were €11.7bn, up 13pc. Nokia recorded an operating profit of €5.4bn for 2006 and €1.5bn for Q4.

Olli-Pekka Kallasvuo, CEO of Nokia, said the quarterly and full-year figures were “excellent”. “We achieved record device volumes, net sales and EPS [earnings per share] for both the fourth quarter and full year 2006. Also, on a sequential basis profitability improved significantly, with gross margins for the quarter up in all Nokia business groups.”

Kallasvuo pointed out that during the year Nokia managed to increase worldwide market share “significantly” to an estimated 36pc, which he said solidified the company’s number one position in the industry. In effect, this means that one in every three mobile phones in the world is a Nokia device. The improved market share didn’t come at the expense of margins or cash flow, Kallasvuo added.

The average selling price of a Nokia handset dropped to €89 in the fourth quarter, down from €93 in Q3 and €99 in the final quarter of 2005. This was due to a lower percentage of sales from Nokia’s higher-end products, specifically from its multimedia business group. The selling price of the entry-level products was relatively stable, Nokia said.

Looking to the year ahead, Nokia said it expected to increase its share still further and said that the overall mobile device industry is expected to grow by 10pc in 2007.

By Gordon Smith