Nokia’s Q4 profit dropped 69 percent from a year earlier, the com...
Nokia’s Q4 profit dropped 69 percent from a year earlier, the company said Thursday, offering a bleak outlook for 2009. Profit fell to $749.8 million and sales were down 19 percent. The operating margin shrank to 3.9 percent, from…
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15.9 percent a year earlier, partly due to restructuring charges for Nokia Siemens Networks and amortization after the acquisition of the location company Navteq. Nokia said it expects mobile device volume to drop 10 percent in 2009, double its previous prediction. On a conference call, CEO Olli-Pekka Kallasvuo blamed “even weaker consumer confidence, unprecedented currency volatility and credit tightness.” Sharp price competition in Q4 hurt Nokia’s market share, he said. It fell to 37 percent from 38 percent the previous quarter. The handset business suffered the most, sales dropping 27 percent year-over-year. The sharpest decline in handsets shipments, 36 percent, came in China, followed by the Middle East and Africa, 23 percent. Nokia also lost ground in the high-end, smartphone category. But it expects to maintain its global market share at 37 percent in Q1 this year. The company is set to slash costs in its handset unit and job cuts are unavoidable, Chief Financial Officer Rick Simonson said. In sales and marketing, Nokia will cut some product program spending, he said. Kallasvuo said the company will continue to invest, but more slowly.