Nokia bucks trend with sales up 50% and record fourth quarter expected

Nokia, the world's biggest maker of cellular phones, provided relief to battered telecom stocks yesterday when it predicted record fourth-quarter profits and a strong outlook for mobile phone sales.

Nokia, the world's biggest maker of cellular phones, provided relief to battered telecom stocks yesterday when it predicted record fourth-quarter profits and a strong outlook for mobile phone sales.

The Finland-based company reported a better-than-expected pre-tax profit of 1.33bn euros (£775m) in the third quarter, from 937m euros a year earlier. Sales surged 50 per cent to 7.57bn euros, with the company citing "continued healthy market growth". Its mobile phone division saw pre-tax profits rise 42 per cent, boosted by sales in Europe and the Asian Pacific region. The company also said the outlook was bright, with likely record fourth-quarter earnings and sales set to surge 25-35 per cent next year.

Nokia, which brought forward its earning report by a week because of market volatility, bucked the recent industry trend for cutting mobile phone sales forecasts, repeating that it expected more than 400 million units in total to be sold this year, and 550 million in 2001. The company expects the number of mobile phone owners to rise to 700 million at the end of this year and reach 1 billion during 2002.

Nokia's shares closed 22 per cent higher at 43.67 euros. Its announcement also helped shares of rival Ericsson, up 9 per cent, and Alcatel, up 7 per cent.

Mobile phone makers and other telecom stocks were hit last week when Motorola, the world's second-biggest mobile phone maker, warned profits in the fourth-quarter and next year would fall short of expectations.

Motorola revised down forecasts of total mobile phone sales this year to 410-425 million, from 425-450 million. Philips Electronics has also slashed its forecast by 22 per cent.

Nokia is snaring market share from rivals because it is introducing new products more quickly. The company said it had strengthened its leading position in GPRS, a fast pre-third generation method of sending data over mobile phones.