Nokia earnings dip 4% despite posting sales growth

Handset leader Nokia saw a 4% drop in third-quarter earnings as it took a hit from one-time charges and saw profit margins fall due to higher sales of low-priced handsets, an Associated Press report said.

The report said Nokia's profit for the three months ending in September was 845 million euros ($1.06 billion), down from 881 million euros ($1.11 billion) in the third quarter of 2005.

Sales rose 20% to 10.1 billion euros ($12.7 billion), with both mobile phones and multimedia handsets showing strong growth, the report said.

One-time charges of 128 million euros ($160 million) related to restructuring of its CDMA weighed down the result, it added.

But investors were mostly concerned about the closely watched average selling price of Nokia phones, which slumped to 93 euros ($117), down from 102 euros ($128) in the second quarter, reflecting a higher proportion of low-end phones sold in emerging markets including India and China, the report said.

Nokia sold 88.5 million mobile handsets in the period, a third more than in 2005, and estimated its share of the global market to be 36%, up from 34% in the second quarter and 33% in the third quarter of 2005, the report said.

The company estimates that 970 million mobile devices will be sold this year, well above its earlier estimate of 915 million.

But the company said that operating profit in many sectors fell, including by 11% in mobile phones and 17% in the networks sector, the report further said.

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