Nokia shares leap on surprise Q3 results
Source: Agencies |
October 21, 2011, Friday
|
Print Edition
Print Edition
THE world's largest cellphone maker, Nokia, reported a smaller than expected fall in third-quarter profits as price cuts and new models lifted sales of its basic cellphones in key markets such as India.
Shares in Nokia jumped on the surprise profit level, up 8.7 percent to 4.67 euros, their highest level since May.
Nokia, which is preparing to fight its way into the high end of the smartphone market with the launch of its first Windows phones next week, said it sold 89.8 million basic mobile phones compared with expectations of between 67 million and 89.7 million.
Protecting its position in emerging markets such as India is crucial for Nokia as rivals such as Apple push in with cheaper smartphones.
The struggling Finnish handset maker reported third-quarter underlying earnings per share of 0.03 euros, compared with a forecast loss of 0.01 euros in a Reuters poll of analysts and a profit of 0.14 euros a year ago.
Swedbank analyst Jari Honko said: "The results were clearly better than expected. The volumes of mobile phones shipped had the biggest role. Also the smartphone volumes were on a higher level than expected.
"It seems Nokia is further into a recovery, or rebound, than had been expected. Fourth-quarter guidance signals this trend will continue."
Nokia forecast fourth-quarter underlying operating profit margin of 1-5 percent in its key phone business.
WestLB analyst Thomas Langer said: "It is maybe a stronger finish to the year than some expected, but the real test will happen during 2012. And this is the reason we remain skeptics of the stock. Investors are falling into a valuation trap."
Nokia, left behind by Apple and Google in the booming smartphone market, will introduce its first new model using Microsoft's Windows Phone platform next week in London. It unveiled the Microsoft deal in February and has since struggled with a fast decline in smartphone sales as it has tried to sell models using its old Symbian platform.
Smartphone sales dropped 38 percent from a year ago to 16.8 million phones, slightly ahead of analysts' average forecast of 15.9 million, but within a wide range of estimates.
Shares in Nokia jumped on the surprise profit level, up 8.7 percent to 4.67 euros, their highest level since May.
Nokia, which is preparing to fight its way into the high end of the smartphone market with the launch of its first Windows phones next week, said it sold 89.8 million basic mobile phones compared with expectations of between 67 million and 89.7 million.
Protecting its position in emerging markets such as India is crucial for Nokia as rivals such as Apple push in with cheaper smartphones.
The struggling Finnish handset maker reported third-quarter underlying earnings per share of 0.03 euros, compared with a forecast loss of 0.01 euros in a Reuters poll of analysts and a profit of 0.14 euros a year ago.
Swedbank analyst Jari Honko said: "The results were clearly better than expected. The volumes of mobile phones shipped had the biggest role. Also the smartphone volumes were on a higher level than expected.
"It seems Nokia is further into a recovery, or rebound, than had been expected. Fourth-quarter guidance signals this trend will continue."
Nokia forecast fourth-quarter underlying operating profit margin of 1-5 percent in its key phone business.
WestLB analyst Thomas Langer said: "It is maybe a stronger finish to the year than some expected, but the real test will happen during 2012. And this is the reason we remain skeptics of the stock. Investors are falling into a valuation trap."
Nokia, left behind by Apple and Google in the booming smartphone market, will introduce its first new model using Microsoft's Windows Phone platform next week in London. It unveiled the Microsoft deal in February and has since struggled with a fast decline in smartphone sales as it has tried to sell models using its old Symbian platform.
Smartphone sales dropped 38 percent from a year ago to 16.8 million phones, slightly ahead of analysts' average forecast of 15.9 million, but within a wide range of estimates.
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