Nokia’s second quarter net profit drops by 61%

Nokia’s second quarter net profit drops by 61%

Nokia today said its Q2 profits have fallen 61% compared with the same period last year despite upping its market share from 39% to 40%.

Net sales increased 4% to 13.2 billion euros (£10.5bn) but net profit dropped 61% from 2.83 billion euros (£2.2bn) in Q2 last year to 1.1 billion euros (£870m) this year.

Slowing consumer spending in the US and Europe was said to have hurt phone sales, while the figures also include hefty redundancy charges following a factory closure in Germany.

Despite the drop Nokia estimated that it had a 40% share of the global handset in the second quarter compared to 39% in the first quarter 2008.

But the average price of handsets has fallen from 90 euros (£71) in Q2 last year to 74 euros (£58.5) this year.

Chief Executive Olli-Pekka Kallasvuo said in a statement that the quarter showed ‘strong underlying profitability’ and said he was ‘optimistic’ for the rest of the year for sales of Nokia devices.

Kallasvuo added that Nokia believed that ‘devices linked with services’ will drive ‘the next wave of growth.’

In its outlook for 2008, Nokia said it had slightly revised its earlier estimate about the global handset market saying it was expected to grow 10% or more.

The Nokia share price went up by 6% shortly after the report was released.

Written by Mobile Today
Mobile Today

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