Nokia 1Q07 results

Publié le par Jean Arnal

Nokia reported 1Q07 results in line with expectations, except earnings. Sales were at €9.9bn, up 4%, and earnings of €979m, down 7%. The operating margin declined 1.5 point to 13%. Mobile phones revenues declined 5% to €5.6bn, while networks revenues were flat; multimedia revenues are up 28% to €2.2bn and Enterprise revenues jumped 75% to €326m. The operating profit was hit by further expenses in the mobile phone division (-14%) and in the Networks division (-48%). But the situation seems under control. Gross margin was steady at about 33% globally and almost steady at 30% (-0.6%) in the mobile handset division. So Nokia manages very well its cost structure.

Nokia is behaving as a market leader, manoeuvring tactically undercutting competitors in emerging markets (where opportunities are), enduring short-term cuts in revenues and profits, but assuring future profits in 2Q07: accompanying price cuts in the low end, but pushing in profitable smartphones in the high end segment. The main result is distancing itself from competition. Nokia shipped 91m units in the quarter (+21%) with growth driven by APAC and MEA regions, and ASP decline of 13% vs 1Q06 and flat versus 4Q06. Nokia share rose 3% after the annoucement.

Nokia 2Q07 outlook for sales is almost flat, but market share would continue to grow.

Publié dans Top stories

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