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Friday, 19 October, 2001, 09:16 GMT 10:16 UK
Nokia profits fall
Nokia telephones
Nokia hopes that new models will boost sales in 2002
The world's largest maker of mobile phones has seen its profits fall.

Nokia's pre-tax profits in the July to September quarter fell by 22% to 1.06bn euros (662m; $965.7m).

However, the company said that it sees market conditions stabilising, and its shares jumped almost 4% amid investor relief that profits had not fallen further.

Nokia, which claims about one third of the global market for mobile phones, had been thought better placed than most of its rivals to weather the global economic slowdown.

Analysts - who had forecast that profits would fall more significantly - now believe that the company may have survived the worst.

Nokia's Chief Financial Officer Olli-Pekka Kallasboor told the BBC's World Business Report that "the growth prospects in this business have not gone away."

"In spite of the fact that earnings were lower than last year, I would claim that we have again recorded a very healthy profitability," he said.

Sales recovery?

Nokia predicted that sales for the last three months of the year will be closer to levels seen in 2000.

The quarter should be stronger "in terms of sales, profitability and EPS (earnings per share)", it said.

The cellphone company revealed hopes that sales growth would recover to a rate of 25-35% at some point next year.

"While the market environment has had an inevitable impact on Nokia's topline growth, we have continued to translate our core strengths of strong brand, excellence in execution and winning products into profitable results," Jorma Ollila, Nokia chairman and chief executive, said.

Demand for mobiles?

While net sales of Nokia mobile phones were 3% lower in the quarter than a year before, the company said this decline compared with a 10% fall in the global cellphone market overall.

The firm attributed the slowdown to a weak upgrade market in Europe, but said it still aimed to win a 40% market share.

Among analysts, Nordea Securities' Mika Paloranta said: "This result should be strong enough to restore general confidence in the company."

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Nokia's Olli-Pekka Kallasboor
"Growth prospects in this business have not gone away"
See also:

23 Aug 01 | Business
Charting the rise of Nokia
19 Jul 01 | Business
Nokia profits down 20%
14 May 01 | Business
Nokia chooses Linux
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