Nokia swings to $733 mn profit in Q3

HELSINKI, FINLAND: Handset major Nokia Corp, which is struggling hard to gain back its market share, reported net profit of euro 529 million ($733.25 million) for the quarter ended September 30.

The profit compares to a net loss of euro 559 million in the year-ago quarter.

The revenue of the company totaled 10.3 billion euros ($14.3 billion) in the quarter versus expectations for 10 billion, while the underlying earnings per share came in at 0.14 euro against an average forecast of 0.10.

While announcing the result, Nokia CEO Stephen Elop also announced that the handset major would lay off 1800 employees.

“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,” he said.

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,” he added.

The company, which sold a lower-than-expected 110.4 million cellphones, said it expects a lower cellphone market share in 2010.

According to market analyst Neil Mawston, Nokia's Q3 performance was mixed.

“Total handset shipments were much lower than expected and its volume share fell. But the handset division's average selling price rose on an annual basis for the first time in almost a decade. Falling low-end end handset shipments were offset partly by higher smartphone volumes,” he added.

He observed that weak handset sales in Asia and Africa were partly offset by higher volumes in Latin America.

“Tight component supply restricted Nokia's volumes and we're a little concerned that a company of Nokia's power has not been able to secure all the necessary parts for its phones. With challenges in emerging markets and high-end smartphones, as well as component supply issues, Mr Elop clearly has a huge to-do list in his first quarter as CEO,” he said.

(With inputs from Reuters)