Nokia meets estimates, but price cuts hurt profit
Handset price cuts help market share but ding earnings; sales jump 33 percent over same period last year.
The company reported earnings per share of 0.21 euros on Thursday, up from 0.20 euros a year ago, and compared with analysts' average expectations of 0.22 euros in a Reuters poll, but within the range of estimates.
Shares in Nokia, already weak after figures from mobile infrastructure rival Ericsson earlier in the day, were down 5 percent at 15.15 euros on the news, while European technology shares were 1.4 percent lower.
Nokia's July-September sales jumped to 10.1 billion euros from 8.4 billion in the same period a year earlier, beating analysts' average forecast.
Nokia said its market share rose to 36 percent in the quarter, while the average selling price (ASP) of its handsets fell to 93 euros, below all estimates in the poll, which ranged from 94 to 104 euros and averaged at 100.
"ASP was much weaker than expected; it fell right through the floor. It seems like they have taken a strategic decision to gain market share at any cost," said Greger Johansson from Redeye.
The Finnish firm said it sold 88.5 million phones in the quarter, 33 percent more than a year ago, beating all expectations.
Over the same period, rivals Motorola and Sony Ericsson increased quarterly sales 39 and 43 percent, respectively, from last year.
Nokia, which sells more than a third of the world's mobile phones, has benefited from its early entry into emerging markets, where a broad line of easy-to-use, cheap models has given it more than a 50 percent share in many countries.
"What they have gained in volumes they lost in average selling prices, and that's what has been dragging down margins as well," said Alexander Peterc, analyst at Exane BNP Paribas.