NEW YORK-Bolstered by strong results in its wireless handset and telecommunications infrastructure businesses, Nokia Corp., Helsinki, reported the highest net sales, profits and earnings per share in its 132-year history.
Nokia closed the fiscal year 1997 with net sales of $9.57 billion, up 34 percent from the prior year. Of that total, Nokia Mobile Phones accounted for $5.03 billion, a 28-percent increase from 1996. Nokia Telecommunications comprised $3.43 billion, a 41-percent rise from the preceding fiscal year.
The company’s overall operating profits increased by a whopping 98 percent, to $1.54 billion from $515.1 million. Nokia Mobile Phones’ operating profits more than tripled, jumping by 168 percent to $698.33 million. Nokia Telecommunications’ operating profits rose by 36 percent to $737.65 million.
Nokia reported company-wide net profits of $593.87 million, a 92-percent increase from fiscal 1996. Earnings per share nearly doubled to $3.85 from $1.95.
In its wireless phones business, the company attributed strong improvements in profitability to “further development of logistics processes, efficient management of working capital and renewal of the product range.”
Nokia said its worldwide market share in Global System for Mobile communications infrastructure reached nearly 30 percent by the end of its fiscal year, and that it also “became the leading base station supplier in Europe.
“Nokia has achieved even greater diversity in its telecommunications operations through the worldwide delivery of infrastructure equipment, such as switching platforms, and through fixed and radio access solutions, wireless data, network management and intelligent network solutions for mobile and fixed networks, as well as related customer services.”
Nokia reported it increased to $437.16 million from $369.1 million in Fiscal 1996 its capital expenditures to expand its manufacturing capabilities for infrastructure products and wireless terminals.
Investment in research and development increased by 30 percent to $829.92 million last year, although this outlay declined slightly as a percentage of net sales, to 8.7 percent from 8.9 percent in 1996. Some 27 percent of Nokia’s 36,647-person work force was involved in R&D during 1997. Most of the 6,626 employees it added last year are involved in research and development, production and customer service.
Total company net sales for the fourth quarter, ended Dec. 31, were $2.89 billion, a 25-percent increase from the same period a year ago, led by a strong 52-percent gain, to $1.16 billion, for Nokia Telecommunications. Nokia Mobile Phones increased net sales by 5 percent to $1.14 billion.
“Nokia Mobile Phones’ sales increased at a rate 5 percent slower than in previous periods as a result of a product mix weighted toward older, low-end products prior to sales of newly introduced products starting in 1998, as well as lack of sales in Japan,” the company said.
“While some Southeast Asian markets developed somewhat slower than anticipated at the beginning of the year, this did not have a material impact on Nokia’s net sales during the fourth quarter.”
During 1997, Nokia Mobile Phones introduced 31 new phone models and wireless data products for 10 standards. Early this month, Nokia began delivering in volume its new Nokia 6100 series phones for GSM-900, -1800 and -1900. By mid-year, the company said it will commence shipment of the new Nokia 2160 Code Division Multiple Access handsets and the new voice-activated Half Rate mobile phones for the Japanese Personal Digital Cellular standard.
For the latest quarter, Nokia’s operating profits were $515.1 million and comprised 17.8 percent of net sales, compared with the same quarter of 1996 when operating profits of $316.134 million represented 13.7 percent of sales.
