Nokia Reports First Quarter Earnings
Apr 18, 2003
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On Thursday, Nokia reported a 13 percent profit increase for first quarter 2003 despite a 3 percent drop in sales. As cause, the company cites improved results in its handset business offsetting weakness in mobile network equipment. For the three months ended March 31, the company says it earned 977 million euros (U.S. $1 billion) on sales of 6.7 billion euros ($7.3 billion). That compares with a profit of 863 million euros on revenue of 7 billion euros for first quarter 2002. Nokia shares rose 7 percent to close at 14.76 euros ($16.11) on the Helsinki Stock Exchange. The mobile phone division posted an operating profit of 1.3 billion euros ($1.4 billion) on sales of nearly 5.5 billion euros ($6 billion), up from an operating profit of 1.2 billion euros on sales of 5.4 billion euros in first quarter 2002. The network division's operating profit plummeted 30 percent to 85 million euros ($92 million) in the quarter as its sales fell by 15 percent to 1.2 billion euros ($1.3 billion). The drop in sales was blamed largely on the company’s ailing network equipment division. Nokia's network unit, which makes equipment for telecommunications networks, has been hit hard as operators and providers cut spending and postpone plans for new, faster networks in a bid to preserve cash. In February, Nokia said it would cut 550 network operations jobs in the United States, Britain, Sweden and Finland. Last month, Nokia said it would eliminate a further 1,800 jobs in its networks unit, or 3.4 percent of its overall work force, in a bid to improve results in the division. Most of the cuts will be in research and development, operations, and sales and marketing. The company said 1,100 jobs would be axed in Finland while the remaining 700 jobs would be eliminated in other countries. The division employs 18,500 workers worldwide. (AP)

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