Boosted by an unexpected recovery in its networks operation, Nokia said net income in the fourth quarter to December 31 rose 8.8% to 1.3bn euros ($1.5bn) on revenue 0.6% lower at 8.8bn euros ($11.2bn). For the year, net income increased 6.2% to 3.7bn euros ($4.6bn) on revenue that fell 1.9% to 29.4bn euros ($37.4bn).
It said phone sales in the current quarter are expected to rise by 3% to 7% buoyed by an increase in selling prices as consumers upgrade to more sophisticated phones. It also said sales of its networks equipment will be flat to slightly up this year, a pessimistic assessment given indications that the market is recovering.
The company said its 2003 performance was hit by a 17% slide in the value of the dollar against the euro over the year and said that at constant currency its sales would have grown by 7% and mobile phone sales would have risen by 12%. Even so, operating income of 1.7bn euros ($2.1bn) on mobile phone sales of 7bn euros ($8.9bn) gives a healthy margin of 24.4%.
CEO Jorma Ollila said Nokia aims to outpace expected handset market growth of over 20% in the first quarter so its market share could soon be approaching 40%. With Motorola hobbled by late delivery of handsets, Nokia is now the largest supplier in the US market and is increasing global CDMA market share.