A worldwide rise in high-end mobile phone sales was behind increased profits for Nokia Corp. in the fourth quarter of 2003, the company said Thursday. Nokia reported a 12 percent rise in net profit to €1.17 billion ($1.47 billion as at Dec. 31, the last day of the period being reported), from €1.05 billion in the same quarter of 2002.
Unit sales of mobile phones rose 20 percent year on year to 55.3 million, giving Nokia an estimated 38 percent market share, the company said. Overall industry volumes for the quarter were an estimated 145 million, the company said. Many of these sales were of high-end, upgrade phones as the market changed, Chairman and Chief Executive Officer Jorma Ollila said in a Webcast conference on Thursday.
"For the first time, 2003 saw a real upgrade market rather than replacement, with good momentum for 2004," he said. The fourth quarter holiday season has traditionally seen sales of low-end phones, but that was not the case in the last quarter of 2003, Ollila said.
Overall, Nokia's net sales for the quarter fell 1 percent to €8.8 billion, but if currency rates had remained constant then sales would have increased by 8 percent, Nokia said. Net sales in the mobile phone division rose 4 percent to €7.0 billion, or 15 percent at constant currency rates, while sales in the networks business reached €1.7 billion, down 18 percent on the year-ago quarter but still higher than the company had expected, Nokia said.
Earnings per share rose 14 percent from €0.22 to €0.25, Nokia said.
The Espoo, Finland, company expects the mobile device market to grow by over 10 percent in 2004, while the networking industry will remain flat, or slightly up on last year, it said. Nokia's first quarter net sales will rise between 3 percent and 7 percent, the company forecasted, and earnings per share will be a predicted €0.17 to €0.19.
Nokia intends to increase its workforce, particularly in R&D (research and development) during 2004, and will introduce new products across all of its business areas, Ollila said.
During Thursday's Webcast Ollila announced that, due to the company's healthy growth, current staff will receive a bonus of 5 percent of the previous six months' salary, the maximum allowed under the company's bonus plan.
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