Nokia, the world's top mobile phone maker, reported a lower-than-expected drop in fourth-quarter earnings on Thursday and forecast strong first-quarter sales as it improves its range of handsets. "The past year was demanding for Nokia," Chief Executive Jorma Ollila said. "(But) I believe we are now better positioned to meet future challenges."
"If we look at the volumes of our competition, I think that we beat them left and right (in 2004)," Ollila told a news conference.
Fourth-quarter earnings fell to 0.23 euros per share from 0.25 euros a year ago, but easily beat the Finnish company's forecast of 0.16 to 0.18 euros and the average and median of market forecasts of 0.19 euros.
The result brings a brighter end to what has been a grim year for Nokia. It warned in April it was losing handset market share due to a patchy product portfolio and spent subsequent months cutting prices to halt and partially reverse the damage as it hurried to bring out more attractive products across all levels of the market.
But it announced seven new handsets in the fourth quarter, the first deliveries of nine new models and said it aims to launch 40 new models in 2005.
And the company said on Thursday fourth-quarter net sales and earnings had beaten forecasts thanks to record volume sales, a stabilisation in average selling prices and a better than expected performance by its networks infrastructure business, where sales were up 12 percent at 1.91 billion euros.
Sales volumes for handsets and other mobile devices rose 19 percent to 66.1 million units, to give a global market share of 34 percent for the quarter and 32 percent for the full year, Nokia said. It estimated the industry sold 643 million handsets last year.
Fourth-quarter group net sales increased 3 percent to 9.1 billion euros, well ahead of the average market forecast of 8.5 billion euros and the company's own forecast last year of between 8.4 billion euros and 8.6 billion euros.
Looking ahead, Nokia said it expected earnings per share in the first three months of 2005 to fall to between 0.12 and 0.15 euros from 0.17 euros a year ago, hit by a 60 to 80 million euro charge related to job cuts at its Multimedia unit. Analysts in a Reuters poll had on average forecast 0.15 euros per share.
But the also company forecast it will have first-quarter sales of 7.0 billion to 7.3 billion euros ($9.1-9.5 billion), up from 6.6 billion euros a year ago, the first rise in the quarter for four years and above the average expectation of 6.9 billion euros given in the analysts' poll.
The forecast of strong first-quarter sales contrasted with subdued outlooks from handset rivals Motorola and Sony Ericsson.