Nokia’s third-quarter sales and profits fell from a year ago, hit by weaker cellphone demand in its European markets, but the world’s top handset maker soothed growing fears about the fourth quarter.
Handset makers have started to feel the pinch from slowing economies, but so far booming demand from emerging markets has outweighed weakness in developed markets.
Nokia’s third-quarter earnings per share fell to €0.29 (39 cents) from €0.40 (54 cents) a year ago, missing the average forecast of €0.31 (42 cents) in a Reuters poll of 37 analysts.
Nokia shares closed down 4.2% in Helsinki at €11.30 ($15.19) after hitting the lowest level in more than four years earlier in the day. Its U.S. shares closed up 9.7% at $16.57 as nervous investors were relieved at the outlook and results.
Nokia said it expected industry volumes to rise 10.5% to 1.26 billion phones in 2008, slightly above the market consensus. This implies 13.5% quarter-on-quarter growth in the typically strong fourth quarter, slightly weaker than in recent years, but reassuring for analysts.
“There will be a sequential and year-on-year growth in the fourth quarter but more muted, somewhat less than in the previous years,” Nokia Chief Financial Officer Rick Simonson told Reuters.
“That is a reflection that some markets have slowed and they will have a little slower Christmas but I don’t think it was cancelled,” Simonson said.
Nokia said it expected its market share in the fourth quarter to stay at the 38% level reached in the third quarter, or to improve slightly.
Having reported volume sales growth in excess of 20% for several quarters, this time Nokia managed only a rise of 5% to 117.8 million phones as sales fell in Europe – by more than 5% – and in North America.
The Finnish firm’s group sales in the third quarter fell 5% from a year ago, hurt by the strong euro, to €12.24 billion ($16.49 billion).
Nokia Chief Executive Olli-Pekka Kallasvuo told analysts it would expand its Comes with Music service, with British operator 3 UK starting to sell a phone with the bundle next month, giving customers unlimited song downloads.
Nokia said it did not plan to continue its share buyback program this year as it aimed to build a cash position in the midst of an “unprecedented disruption” in the financial markets.
