Nokia, the world's largest manufacturer of cell phones, said Thursday its first-quarter earnings fell compared to the same quarter last year as handset priced declined, but shares climbed sharply as the numbers topped market expectations.
Nokia reported operating earnings of $1.77 billion (1.3 billion euros) for the first quarter, or 34 cents (0.25 euro) a share down from $1.86 billion (1.37 billion euros), or 34 cents (0.25 euro) a share, from the same quarter a year ago. Excluding one-time items, Nokia earned 35 cents (0.26 euro) a shares.
Revenues rose to $13.46 billion (9.86 billion euros) from $12.92 billion (9.5 billion euros) in the year-ago period.
Analysts surveyed by Thomson Financial predicted earnings of 32 cents (0.24 euros) a share on revenues of $13.14 billion (9.66 billion euros).
The company shipped 91.1 million handsets in the first three months of the year, up 21% from the same quarter a year ago, but down 14% from the seasonally strong fourth quarter. The average selling price (ASP) of handsets fell to 89 euros, in line with expectations of analysts surveyed by Dow Jones.
“With strong emerging market growth, your ASPs naturally go down, that’s not a bad thing in itself … we have the broadest product portfolio, this is not just an emerging markets story, it’s across the entire portfolio,” Rick Simonson, chief financial officer of Nokia told “Power Lunch.”
The company says its handset market remained at 34%, the same level as the first quarter. Nokia expects share to remain steady in the second quarter, but still plans to gain share over the course of the year. Overall the handset market should grow by about 10% this year, Nokia said.
Nokia’s decision to cut prices, and its array of low-cost phones, enabled it to take market share from rival Motorola, which reported a net loss and declining sales for the first quarter Tuesday. Nokia’s market share is now at its highest level since late 2003.
Shares in the company rose 2.9% during trade in Finland.