Nokia's fourth quarter profits jump

Nokia, the world's top cellphone maker, reported a 57 percent rise in earnings per share in the October-to-December quarter, with booming demand in emerging markets boosting its global market share to 40 percent.
Nokia's fourth-quarter earnings per share, minus one-off items, rose to 0.47 euros, helped by buoyant demand for cheap phones in emerging Asian markets, and beating the average forecast of 0.44 euros in a Reuters poll of 34 analysts. Shares in Nokia soared on the news and were up 13.4 percent at 23.50 euros at 1218 GMT.
Nokia sold 133.5 million phones in the quarter, more than its three closest rivals combined, and beating analysts' average forecast of 130.7 million phones in the poll.
The Finnish company has a strong lead in emerging markets including China and India, which it has been fiercely defending. Nokia's multimedia unit, which sells advanced phones aimed at consumers in the developed world, more than doubled its operating profit from a year ago to 670 million euros, helped by Apple's foray into the cellphone business with its iPhone.
Nokia and other large vendors increased their market share in the quarter at the expense of struggling Motorola, which said on Wednesday it would post an operating loss in the current quarter as recovery in its cell-phone business was taking longer than expected. Nokia said it expected its market share to stay at the 40 percent level in the first quarter, but it is targeting market share growth in 2008.
Nokia said the average price of phones sold rose by 1 euro from the previous quarter to 83 euros, beating analysts' average expectation of 82 euros. Helped by its larger scale, Nokia boasts much stronger profit margins than its rivals; the operating profit margin from its three cellphone business units rose to 23.8 percent.
Its closest rivals in terms of profitability, Sony Ericsson and Samsung, reported profit margins of 13 percent and 11.4 percent, respectively. Nokia Siemens Networks, a 50:50 network equipment venture between Nokia and Germany's Siemens, said its underlying operating profit rose to 4.3 percent of sales from 3 percent in the previous quarter. Nokia repeated it expected the market for network equipment would grow only slightly in 2008.