HELSINKI, Finland-Nokia Corp.’s net profit popped to more than $1 billion in its third quarter, up 29 percent compared with the same quarter last year. However, the company’s stock price fell almost 6 percent to $16.06 per share in trading after the news, partly due to fears over the company’s reliance on low-end handsets.
“Overall industry volume growth for the third quarter continued to exceed our expectations at 199 million units,” said Jorma Ollila, Nokia’s chairman and chief executive officer. “We have again raised our full-year market estimate to approximately 780 million units. Our own third-quarter volumes grew to a record 66.6 million units.”
Nokia’s record shipments of 66.6 million phones in the quarter gives the company a solid 32-percent worldwide market share, according to research and consulting firm IDC. The firm said Motorola Inc. commanded 18.6 percent of the market in the third quarter, while Samsung Electronics Co. Ltd. scored 12.9 percent. IDC said industry is on track to ship 208 million phones in the third quarter.
Companywide, Nokia reported an 18-percent increase in year-over-year sales to $10 billion. In its mobile-phone business, the company reported around $1 billion in operating profit, up 4 percent from the same quarter a year ago. In the company’s networks business, Nokia posted an operating profit of $188 million, a 20-percent drop over the year-ago quarter.
“As we indicated in July, profitability in our networks business during the third quarter continued to be under pressure,” Ollila said. “This was largely due to the combined effects of a fiercely competitive market, our investments into building a presence in the growing network services market and our ongoing push into new growth markets.”
Nokia said it expects the handset market to continue growing in the fourth quarter, but said its phone prices likely will drop due to demand from Latin and North America, where low-end products predominate.
