Open

Coming up

Don't miss

Replay


LATEST SHOWS

ENCORE!

Haute Couture: the hand-stitched clothing made in Paris that sells for the price of small yachts

Read more

IN THE PAPERS

'Caution, another Cast Lead lies ahead'

Read more

BUSINESS DAILY

Rising into the ranks of Haute Couture

Read more

DEBATE

Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive

Read more

DEBATE

Gaza: How to Stop the Spiral? Israel Readies For Ground Offensive (part 2)

Read more

MEDIAWATCH

A thin line between fact-checking and propaganda in Gaza social media coverage

Read more

#THE 51%

Sweden: A Feminist's Paradise?

Read more

FOCUS

Ireland's missing babies cast light on dark history

Read more

WEB NEWS

World Cup 2014: Germany-Brazil inspires the Web

Read more

  • Amazon snubs French free delivery ban with one-cent charge

    Read more

  • Are French high school students getting smarter?

    Read more

  • Disgraced Suarez leaves Liverpool for Barcelona

    Read more

  • Kurdish forces take over two oilfields in northern Iraq

    Read more

  • In Pictures: Petrol station hit by Hamas rockets

    Read more

  • Manhunt as FIFA partner flees Rio hotel to avoid arrest

    Read more

  • Video: Living in Tel Aviv, under threat of rocket attack

    Read more

  • Video: Palestinians fear full Israeli military offensive in Gaza

    Read more

  • US prepared to negotiate Gaza ceasefire, Obama says

    Read more

  • French companies will have to accept anonymous CVs

    Read more

  • Ukrainian forces close in on Donetsk

    Read more

  • Germany asks US intelligence station chief to leave country

    Read more

  • Video: Muslims in China confront obstacles to Ramadan fasting

    Read more

  • Tour de France passes WWI Chemin des Dames battlefield

    Read more

  • Senegalese man awarded French visa in gay marriage debate

    Read more

Business

Nokia's quarterly profit slumps 66 percent

©

Text by NEWS WIRES

Latest update : 2009-07-17

Finland's giant Nokia announced its profit was down 66 percent compared to 2008, with a quarterly profit of 380 million euros. The good news for Nokia is that its Q2 profit is far better than the 122 million euro it made in the first quarter.

AFP - Finnish telecoms giant Nokia reported a 66.0-percent collapse in quarterly net profit to 380 million euros (535 million dollars) on Thursday because of a drop in handset sales and weak prices.
  
The company's share of the worldwide handset market fell to 38 percent, down from 40 percent 12 months earlier, the company said.
  
Nokia said the worsening global economic conditions were the key driver behind the drop in profits, citing "weaker consumer and corporate spending, constrained credit availability and currency market volatility."
  
"People are trading down to a certain extent," buying cheaper phones, said Nokia's chief financial officer Rick Simonson in a conference call.
  
"Competition remains intense," chief executive Olli-Pekka Kallasvuo said in a statement. "But demand in the overall mobile device market appears to be bottoming out."
  
The company also said that global mobile phone volumes would fall by about 10 percent in 2009 from the level in 2008, and that growth for rest of this year would be flat.
  
Shares in Nokia were down 13.9 percent on the news to 9.55 euros on the Helsinki stock exchange at 1435 GMT in an overall market down 1.96 percent.
  
Analysts said the shares were falling because Nokia cut back its profit target for its devices and services unit, indicating it faces tough price competition from other mobile manufacturers.
  
It lowered its profitability target for its devices and service unit, its biggest division responsible for handset manufacturing.
  
Industry watchers said that although the results were "well in line with market expectations" they were disappointed that Nokia had lowered its profitability target.
  
"A lower margin target in (handset) devices for the second half indicates that there is a price competition ongoing" between mobile phone makers, FIM Bank analyst Michael Schroeder told AFP.
  
Markets were also disappointed "that the average selling price fell sharper than expected," Pohjola Bank analyst Hannu Rauhala noted.
  
For the period April 1 - June 30, the average price for a Nokia handset was 62 euros, down from 65 euros in the first quarter.
  
The Finnish company sold around 103 million handsets worldwide in the second quarter.
  
Its revenues amounted to 9.9 billion euros, down by nearly 25 percent from 13.2 billion euros during the same period in 2008. Operating profit fell by 71 percent from a year ago to 427 million euros.
  
Nokia launched a restructuring programme in January aiming for 700 million euros in savings over the next two years. So far this year, it has announced about 4,000 job cuts, including 1,300 voluntary departure packages.
  
Simonson told journalists and investors: "We will continue to assess our cost structure and take action to strike the right balance between near-term cost controls and investing for future growth and profitability."

Date created : 2009-07-16

Comments

COMMENT(S)