Nokia is reporting a 25% increase in Q1 profits, up to USD1.9bn from USD1.6bn for the same period last year. Revenue rose 28% to USD20bn from USD15.6bn, bouyed by strong performance in emerging markets such as Africa, Asia and the Middle East. The company says it sold 115m handsets during the period, a 27% increase from the same period in 2007, but its overall share of the world market dropped to 39% in Q1 from 40% in the final quarter of 2007.
Despite the positive results, company stock dropped 13.5% to USD28.76 following the announcement, primarily due to analyst expectations of profit increases of around 42% for the period.
Nokia Chief Executive Olli-Pella Kallasvuo criticised investors for pushing the share price down, saying that the companyâ€™s performance for the quarter did not warrant a stock slump. Kallasvuo says that global economic concerns and higher labour and material costs would not see a tremendous impact on Nokiaâ€™s future performance as mobiles have become a â€œnecessityâ€ item, with the company predicting an overall 10% growth in industry sales by the end of the year.
However, Nokia does admit that the mobile market expects to see a decline in Euro terms for the year, with US recession concerns and possible flow-on European effects driving down demand in established mobile markets. The company saw its US sales drop 45.8% on Q1 2007 results and European sales rose only 7%. These results are expected to be countered by emerging market growth however, with Latin American sales up 68%, Asia Pacific sales up 44%, Chinese sales up 34% and African and Middle Eastern sales increasing 29%.