Nokia Reports 90% Drop in Net Profit

April 16, 2009
Weakest profit for company in 10 years

Nokia, the world's leading handset maker, on April 16 reported a 90% drop in its first-quarter net profit but its shares shot higher as investors seized on signs of improving market conditions. The Finnish firm's net profit in January-March was 122 million euros (US$160 million), the weakest net profit this decade.

Chief executive Olli-Pekka Kallasvuo said Nokia's sales from January to March were dented as retailers held back on ordering new handsets amid the global financial crisis. But Kallasvuo noted that it was getting easier to predict demand and said "the demand picture (is) becoming more predictable as we enter the second quarter."

Nokia's market share of 37% was down from 39% in the same quarter a year ago, but was stable from the fourth quarter.

It said it saw a light at the end of the tunnel, and expected its market share to rise in the second quarter.

The company's operating profit dropped by 74.1% to 514 million euros, from 1.98 billion euros for the first quarter of 2008. Sales amounted to 9.28 billion euros, down by 26.8% from 12.66 billion euros during the same period in 2008.

Nokia reiterated it saw global mobile device volumes falling around 10% in 2009 year-on-year.

The company wants to make some 700 million euros in savings over the next two years as part of a restructuring plan announced last January. Nokia has announced more than 3,000 job cuts since January as part of a vast cost-cutting package, including 1,000 voluntary departure packages.

Copyright Agence France-Presse, 2009

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