Nokia sees profits, market share shrink in Q4

[January 27, 2011]  HELSINKI (AP) -- Nokia Corp. on Thursday said its net earnings fell 21 percent in the fourth quarter as competitors clawed market share away from the world's top cell phone maker.

Net profit was euro745 million ($1.02 billion), down from euro950 million in the last quarter of 2009.

Sales rose 6 percent to euro12.6 billion ($17.2 billion), but the Finnish company's margins were down and its market share shrank to 31 percent from 35 percent a year earlier.

Nokia's share price plunged more than 6.5 percent to euro7.29 ($9.97) in early afternoon trading in Helsinki.

CEO Stephen Elop said growth trends in the market remain encouraging but acknowledged that "Nokia faces some significant challenges in our competitiveness and our execution."

Apple Inc.'s iPhone has set the standard for smart phones for many design-conscious consumers, while Research In Motion Ltd.'s BlackBerrys have been the favorite of the corporate set.

"In short, the industry changed, and now it's time for Nokia to change faster," Elop said.

Apple sold more than 16 million iPhones in the quarter, 86 percent more than a year ago. Research in Motion Ltd. hasn't released fourth-quarter numbers yet.

Neil Mawston, from Strategy Analytics in London, described Nokia's result as "lackluster" and said it had suffered from component shortages which likely caused higher costs.

"The results were broadly in line with expectations, volume was a little bit down, operating margin was a little bit less than we had expected so that was a little bit disappointing," he said.

[Associated Press]

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