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Nokia net soars in 1Q
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April 27, 2000: 8:51 a.m. ET
Finnish mobile phone leader tops target with 76% rise in net earnings
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LONDON (CNNfn) - Nokia, the world's largest mobile phone maker, posted a 55 percent rise in first-quarter net income Thursday, beating expectations and sending its shares sharply higher.
The Finnish firm reported net earnings of  891 million ($820 million) in the quarter ended Mar. 31, up from 505 million a year earlier. Pretax profit rose 76 percent to 1.3 billion, ahead of the 1.1 billion consensus among analysts polled by Reuters.
Nokia said sales climbed 69 percent to 6.54 billion, with its mobile phone operation posting the strongest revenue gain, up 88 percent to 4.84 billion.
The division's operating profit also climbed 88 percent. Sales at the unit that makes telephone network systems rose 36 percent to 1.5 billion. 
The company, which touted the prospects of the next generation of mobile phones built around the Wireless Application Protocol, or WAP, said that it's on track to match or beat earlier forecasts of full-year sales growth of between 30 and 40 percent.
In a statement, Jorma Ollila, chairman and chief executive, said: "Operators, new wireless services providers and the leading companies in many service sectors continue to invest in technologies that enable the mobile Internet. We expect strong market growth to continue as consumers begin to embrace the benefits of mobile communications in all major markets."
Investors applauded the results. Nokia shares rose 7.4 percent to 59.65 in Helsinki trading Thursday afternoon, just below their high in 2000 of 60.26 set on March 28.
'Great numbers' in wake of margin fears
"They were great numbers - that's the bottom line," said Angela Dean, an analyst with Morgan Stanley Dean Witter.
The company's operating profit margin climbed to 20.1 percent from 19.8 percent a year ago, reversing a decline in margins in the fourth quarter of 1999 amid intensifying competition.
Last year, analysts feared a third generation of mobile phones, allowing the handsets to receive data and better Internet access, would bring with it a crop of new competitors that could cut into Nokia's market leadership and lead to lower profit margins, also impacting top rivals Ericsson and Motorola.
"If you look back, analysts were feeling that margins were going to decline," said Howard Wheeldon, an analyst at Prudential Bache in London who has a 'buy' rating on Nokia shares. "That hasn't happened, and instead the margins continue to go up."
Nokia was thought to be particularly vulnerable because roughly three-quarters of its total revenues come from handset sales - whereas Ericsson's main business is network infrastructure, used in both fixed-line and mobile telecommunications services. 
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