Nokia sales slip 5%, shares dip 4.6%

NOKIA predicted a 10th quarter of faltering sales as the dollar falls against the euro and network equipment demand drops.

Third-quarter profit rose 35% as a charge wasn't repeated.

Net income rose to €823 million ($956 million), or 17 cents a share, in the period from €610 million, or 13 cents, a year ago, spokeswoman Ulla James said on a conference call.

Sales slipped 5%. Nokia shares fell as much as 4.6% to €14.01, trading at €14.22 at 3.59pm in Helsinki.

Nokia's sales will fall for a second year as network equipment demand slumps and the dollar declines against the euro.

Chief executive officer Jorma Ollila is this year introducing a record 35 new phones, including one that doubles as a Gameboy competitor, to revive sales as European and US markets near saturation and handset prices drop.

"Nokia may have been caught off guard in its main European market and lost market share in higher-end phones," said Patrick Nielsen, who helps manage $1.4 billion in equities at Mapfre Inversion SV.

"We will still see growth, but not on the same level as before obviously." Motorola Inc, the No 2 handset maker, this week said third-quarter net income was little changed at $116 million, as sales rose 4.5%.

Sony Ericsson Mobile Communications Ltd, the world's fifth-biggest maker of cellular phones, yesterday posted its first quarterly profit as sales surged 50%.

Nokia's second-quarter global market share to 35.9% from 34.2% a year earlier, according to the most recent figures from Gartner Inc. Motorola had a 14.6% share, Samsung Electronics Co 9.9% and Siemens AG 7%.

Third-quarter sales at Espoo, Finland-based Nokia, which makes every third mobile phone in the world, fell to €6.9 billion from €7.2 billion a year earlier, the company said in a Helsinki stock exchange statement.

Nokia said fourth-quarter earnings will probably be 20 cents to 22 cents a share, compared with 22 cents a year earlier. The fourth-quarter forecast for reported earnings per share suggests Nokia's profit will be little changed this year at 70 cents to 72 cents a share, compared with 71 cents in 2002.