Nokia Q4 earnings decline 70% as sales slow

The company shipped 113.1m phones, down 15% over last year

Nokia has reported a 68.6% decline in the fourth-quarter net profit to E576m ($745.2m), compared to E1.8 billion ($2.3 billion) in the year-ago quarter, on revenue down 19.4% at E12.6 billion ($16.3 billion). Operating profit fell 80.3% to E492m ($636.5m) from E2.4 billion ($3.2 billion) in the same quarter last year.

The company shipped 113.1 million phones, down 15% over last year, with the average selling price declining from E83 ($107.3) to E71 ($91.8). The company's market share in the mobile device market for the quarter was 37% compared to 40% in the fourth quarter 2007 and 38% in the third quarter 2008.

Revenue from Nokia Siemens Networks decreased 5% to E4.3 billion ($5.5 billion) compared to E4.6 billion ($5.9 billion) last year. Revenue fell across geographies with Greater China, Europe, and Latin America leading the decline.

During the quarter the company announced the reorganization of its sales, marketing, research, and other activities, impacting an estimated 850 employees globally. It completed the acquisition of Symbian and also announced plans to sell its security appliance business to Check Point Software.

For fiscal 2008, it reported net income of E3.9 billion ($5 billion) compared to E7.2 billion ($9.3 billion) last year, on revenue down marginally at $50.7 billion ($65.5 billion).

Olli Pekka Kallasvuo, chief executive at Nokia, said: In recent weeks, the macroeconomic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility, and credit tightness continuing to impact the mobile communications industry. We are taking action to reduce overall costs and to preserve our strong capital structure.

Looking ahead, the company expects industry mobile device volumes to decline sequentially in the first quarter.

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