10/21/2010 3:03:00 PM
Nokia sees profit plummet by 14%
Nokia has reported a 14% drop in profit to £563m as the company continues to struggle amid growing competition from rival manufacturers.
Nokia reported its results for the third quarter ended September 30 2010 today (21 October). The manufacturer, which has recently appointed former Microsoft veteran Stephen Elop as its global CEO, also saw a 6% fall in the sales of devices and services in Europe.
However, handsets shipped in Europe grew by 8% to 29.2 million units, compared with 27.1 million units a year earlier. Overall, the company shipped 110.4 million units, up 2% year on year and down 1% sequentially. Smartphone volumes surged to 26.5 million units, up 61% year-on-year and 10% sequentially.
Average selling price rose to €65 – from €64 in Q3 2009. Gross margin fell year on year from 30.9% to 29%.
Nokia claimed the decline in gross profit and gross margin was due to industry wide shortage of key components and the appreciation of certain currencies against the euro.
Nokia CEO Stephen Elop said: ‘In the five weeks since joining Nokia, I have found a company with many great strengths and a history of achievement that are second to none in the industry. And yet our company faces a remarkably disruptive time in the industry, with recent results demonstrating that we must reassess our role in and our approach to this industry.
‘Some of our most recent product launches illustrate that we have the talent, the capacity to innovate, and the resources necessary to lead through this period of disruption. We will make both the strategic and operational improvements necessary to ensure that we continue to delight our customers and deliver superior financial results to our shareholders.’