Nokia`s has produced impressive fourth quarter results, widening the gap between them and the other handset vendors. For the quarter handset shipments were 133.5 million, up 20% sequentially and 27% year on year. The average sale price rose slightly to 83 euros, yielding total revenues of 15.7bn euros - a 22% sequential gain and 34% rise over the year. Profitability also improved with operating margin at 15.9%, up from 13% for Q4 2006 thanks to gains in all divisions except Nokia Siemens Networks (although it was up sequentially). The company generated 2.7bn euros in free cash flow.
For the year handset shipments were 437m, revenue was ?51 bn (up 24%) and operating profit was £7.99 bn (up 46%).
President and CEO Olli-Pekka Kallasvuo described this as an `impressive performance for the quarter`. He estimated that Nokia`s market share has now reached the much-anticipated 40% mark and stressed that Nokia will continue trying to build market share.
In looking ahead, Nokia said that there is currently no sign of a slowdown in mobile phone sales. So Q1 08 should follow normal seasonal trends and the guidance for 2008 is volume growth of 10% to 1.25bn.
Martin Garner, Mobile Director, commenetd: “Impressive understates this performance. Nokia is now as big as Samsung, Motorola, Sony Ericsson and LG added together. These numbers were delivered in spite of some component shortages, a drop in Nokia`s shipments in the US and a slight loss of market share in China. Also inventory levels going into 2008 are lower than they were a year ago, so the extra volumes have not just been filling up the channels. It`s hard to see any other vendor getting close to this level for a long time.”