Nokia profit leaps on higher phone sales

Nokia’s net profit jumped in the third quarter as the company made up for the falling average selling price of its phones by shipping more of them, the company said Thursday.

For the three months ending Sept. 30, net profit increased 85 percent over the third quarter of 2006, to €1.6 billion ($2.3 billion). Net sales rose 28 percent to €12.9 billion. Earnings per share rose 90 percent to €0.40.

The company shipped 112 million units, 26 percent more than in the same period a year before. Nokia estimates it holds a 39 percent share of the mobile market.

The ASP (average selling price) of mobile phones, however, has fallen from €90 to €82, Nokia said. The company said it expects the ASP to continue to decline but volume demand to increase through the end of this year and next.

The most dramatic change came from Nokia’s Enterprise Solutions business unit, which includes security appliances and software as well its E Series phones, which are aimed at business users. Operating profit for the unit was €88 million compared to a €65 million loss in the third quarter of 2006. Nokia attributed the rise to strong sales of its E65 model.

Nokia Siemens Networks reported a 120 percent operating profit decline, which Nokia said was due to restructuring costs and other one-time items. The division, launched in April, is a combination of Nokia Networks and Siemens’ carrier-related operations for fixed and mobile networks. Nokia said it has identified €500 million in savings in combining the two entities that will be realized at the end of 2008.

However, sales for Nokia Siemens Networks increased 7 percent over the second quarter of this year, which was the first quarter Nokia reported results for the division.