Nokia has posted an expected sharp drop in third-quarter profit due to weak handset demand but the world's largest mobile phone maker has shown it is handling the slowdown well by forecasting healthy earnings during the key fourth quarter Christmas sales period.
Nokia said it had made a pro-forma pre-tax profit of euro 1.068 billion in the three months to September 30th, a fall of 22 per cent but in line with market expectations.
In its key mobile phone division third quarter operating profits fell 6 per cent on a year earlier to euro 1.002 billion with sales down 3 per cent at euro 5.269 billion.
Operating margins of 19 per cent were above expectations and appeared to show that the company had avoided the worst effects of a price war that has been raging in the sector this year as producers have attempted to shift inventories.
The market has been waiting for comments whether the industry bellwether expects a turnaround for the weak sector battling saturated markets and a global economic downturn.
Nokia reiterated its 2002 forecast of reaching a sales growth of 25-35 per cent some time during next year.
Nokia shares rose five per cent to euro 22.05 after the results. Nokia has seen its share rise 44 per cent between September 11th and October 18th. It has outperformed the top 50 European stocks by 32 per cent and rival Ericsson by 22 per cent.
Analysts have largely written off 2001 as a year of transition as telecoms operators move over to higher speed mobile networks and manufacturers launch Internet-enabled GPRS (general packet radio service) phones.