Nokia posts 19% profit increase in Q4

Shares of handset leader Nokia rallied after the world's No. 1 mobile phone maker posted a 19% rise in fourth-quarter earnings on record sales, an Associated Press report said.

The Associated Press report also said the closely watched average selling price of Nokia phones continued to slump, driven by sales of low-end products, and CEO Olli-Pekka Kallasvuo vowed to develop new handsets tailored for Nokia's weakest market: North America.

Net profit came to 1.27 billion euros ($1.65 billion), up from 1.07 billion euros ($1.38 billion) in the fourth quarter of 2005, the report said.

Analysts polled by SME Direkt had forecast a net profit of 1.11 billion euros ($1.44 billion) and sales of 11.6 billion euros ($15.1 billion), the report added.

Nokia, whose 2006 sales of 41.1 billion euros ($53.4 billion) for the first time eclipsed Finland's national budget, was the last of the world's top mobile phone makers to release fourth-quarter earnings, the report said.

Motorola, Nokia's main rival, said last week its profits dropped 48% in the last three months of 2006 and announced it would cut 5% of its work force to improve operating costs, the report said.

The industry's No. 3 player, Samsung Electronics, also saw lower earnings, citing price declines for its other key products such as flash memory chips and liquid crystal displays.

Meanwhile, the fast-growing Sony Ericsson said its net profit more than tripled in the quarter, beating expectations as record sales of its music and camera handsets helped it gain market shares, the report further said.

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