Monday, January 26, 2009

Nokia profit dives as it expects a 10% decline in device sales this year

Nokia warned of a further weakening in the mobile phone market as it posted a 69% slump in quarterly profit Thursday. Its fourth quarter earnings fell to $746.3 million on 19% lower sales of $16.45 billion.

The handset leader once more revised downward its 2009 outlook. It now expects a 10% decline in device sales industry-wide. Last month it only predicted a 5% decline.

Handset shipments were down 15% year-on-year to 113.1 million. It shipped 468.4 million devices over the full year, up 7.2%, but said market share was 37%, down from 40% in 2007 and 38% in Q3.

Operating profit declined 37.8% for the full year to $6.43 billion. Group-wide sales decreased 1% to $65.6 billion.

The company expects its profit margins to decline slightly in the first half of the year, but is predicting it will maintain its current market share.

Nokia Siemens Networks continues to run at a loss. It recorded sales of $5.57 billion - a 5% year-on-year decline, but a 24% increase over its Q3 results. It posted operating losses of $231.8 million for the quarter and $391 million for the year. It lost $1.7 billion in 2007.

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