The world's largest mobile phone maker Nokia reported a smaller than expected fall in third quarter profits as price cuts and new models lifted sales of its basic mobile phones in key markets like India.
Nokia, which is preparing to fight its way into the high end of the smartphone market with the launch of its first Windows phones next week, said it sold 89.8 million basic mobile phones compared to expectations for 67.0-89.7 million.
The struggling Finnish handset maker reported third quarter underlying earnings per share of 3 cent, compared with a forecast loss of 1 cent in a Reuters poll of analysts and a profit of 14 cent a year ago.
"The results were clearly better than expected. The mobile phones volumes shipped had the biggest role, also the smartphone volumes were on a higher level than expected," said Swedbank analyst Jari Honko.
"It seems that Nokia is further into a recovery, or rebound, than had been expected. Fourth quarter guidance signals that this trend will continue."
Nokia forecast fourth quarter underlying operating profit margin of 1-5 per cent in its key phone business.
Left behind by Apple and Google in the booming smartphone market, Nokia will introduce its first new model using Microsoft's Windows Phone platform next week. It unveiled the Microsoft deal in February and has since struggled with a fast decline in smartphone sales as it has tried to sell models using its old Symbian platform.
Its smartphone sales dropped 38 per cent from a year ago to 16.8 million phones, slightly ahead of analysts average forecast of 15.9 million, but within a wide range of estimates.
Apple's iPhone sales dropped to 17.1 million in the September quarter, disappointing investors, but were still head of Nokia and the new iPhone 4S is breaking Apple's previous sales records.
So far Windows Phone's success has been limited - its market share is just 2-3 per cent, compared with around 50 per cent for Google's Android and around 15 per cent share for Apple.
Separately, equipment maker Ericsson reported a forecast-beating third quarter driven by a surge in mobile broadband use.
Smartphones and tablet computers have fuelled demand for faster, more efficient networks, boosting sales for Ericsson in recent quarters.
A cautious outlook and a gross margin well below forecasts failed to chill investors, who focused on strong sales growth and Ericsson's conviction it is taking market share from rivals.
Other analysts saw the falling margin as a sign Ericsson is aggressively targeting market share, giving it a better chance at longer-term growth at a time it is facing sharp competition from rivals like China's Huawei .
Earnings before interest and tax excluding joint ventures were 6.3 billion Swedish crowns ($955 million), compared with a forecast for 5.75 billion in a Reuters poll.
Sales were well above forecast, with the key networks unit seeing 25 per cent growth.
The operating margin for the networks unit, however, fell to 13 per cent from 17 per cent a year earlier.
Reuters
