surprised Wall Street with a rosy second-half outlook for its mobile phone unit, despite posting a 61% slide in profits from a year ago due to one-time charges.
The Finnish mobile-phone giant posted earnings for the quarter of 1.10 billion euros, or 29 euro cents a share, down from 2.82 billion euros, or 72 euro cents a share, in the year-ago period. Excluding charges related to closing the Bochum site in Germany, restructuring costs and other one-time items, Nokia notched a profit of 1.36 billion euros, or 36 euro cents a share.
Sales for the quarter ended last month were 13.15 billion euros, up 4% both sequentially and from a year earlier. Analysts on average expected Nokia to post a profit for the second quarter of 1.32 billion euros, or 36 euro cents a share, on sales of 12.88 billion euros, according to Thomson Reuters
"Nokia delivered increased device market share and strong underlying profitability in the quarter," CEO Olli-Pekka Kallasvuo said in a press release. "Looking at the rest of the year, we are optimistic and have had good feedback about the broad range of new products we expect to sell in our device business."
Nokia's management endorsed a 10% or more year-over-year global market unit growth, which analysts expect will allay concerns of a broad industry slow down. Nokia said it expects industry mobile device volumes in the third quarter 2008 to be up sequentially, and for its market share to remain the same in the third quarter.
Shares of Nokia jumped more than 8% to $27.15 in early trading. Competing phone maker
was adding 1%, and wireless technology firm
was down fractionally.
, which will post results Friday, was up 3.9%.
, which makes chips used in high-end 3G cell phones, were rising 2%.
Handset shipments hit 122 million in the quarter, Nokia said, coming in slightly ahead of expectations. Shipments were up 21% from a year ago and 6% from the previous quarter, raising Nokia's market share to 40% from 38% a year ago and 39% sequentially.
By geographic area, mobile device volume surged by 73.1% in North America from the first quarter. Volume in Greater China slid 16.2% from the previous quarter, showing that Nokia is still having trouble gaining traction in the region.
On the negative side, the average selling price of its mobile devices slipped to 74 euros, down from 79 euros sequentially and 18% year-over-year, indicating the company sold a higher quantity of lower-end phones. Nokia said that 40% of the decline in ASP was caused by the impact of exchange rates. Additionally, Nokia said gross margin slid 2% from the previous quarter.
Nokia's management also addressed concerns over the lack of new products introduced during the second quarter. "We have a lot of new products coming in all product segments," said Kallasvuo during the company's conference call.