Nokia Posts Q3 Sales Decline, Mobile Shipments Rise

Nokia’s third quarter 2008 net sales decreased 5% to EUR 12.2 billion, compared with EUR 12.9 billion in the
third quarter 2007. At constant currency, group net sales would have increased 1% year on year and
decreased 7% sequentially. The company said despite the global economic condition, it was able to achieve solid margins and operating cash flow of EUR 1.3 billion for Q3 because of its scale and low-cost structure. Some highlights of the report:

Nokia net sales of EUR 12.2 billion, down 5% year on year and down 7% sequentially (up 1% and down 7% at constant currency).
Devices & Services net sales of EUR 8.6 billion, down 7% year on year and down 5% sequentially (down 1% and 5% at constant currency).
Services and software net sales of EUR 115 million (billings of EUR 140 million).
Estimated industry mobile device volumes of 310 million units, up 8% year on year and up 2% sequentially.
Nokia mobile device volumes of 117.8 million units, up 5% year on year and down 3% sequentially.
Nokia estimated mobile device market share of 38%, down from 39% in Q3 2007 and down from 40% in Q2 2008.
Nokia mobile device ASP of EUR 72, down from EUR 74 in Q2 2008.
Devices & Services gross margin of 36.5% up sequentially from 36.1% in Q2 2008.
NAVTEQ net sales of EUR 156 million and non-IFRS operating margin of 18.5%.
Nokia Siemens Networks net sales of EUR 3.5 billion, down 5% year on year and down 14% sequentially (flat and down 14% at constant currency). Nokia Siemens Networks reported gross profit increased 4% to EUR 1.1 billion, compared with EUR 1.0 billion in the third quarter 2007, with a gross margin of 30.8% (28.3%).

The company issued the following guidance:

Nokia expects industry mobile device volumes in the fourth quarter 2008 to be up sequentially.
Nokia expects its mobile device market share in the fourth quarter 2008 to be at the same level or slightly up sequentially.
Nokia expects industry mobile volume will be approximately 1.26 billion in 2008, up from approximately 1.14 billion units Nokia estimated for 2007.
Nokia continues to target an increase in its market share in mobile devices in 2008.
Nokia and Nokia Siemens Networks continue to target for Nokia Siemens Networks market share to remain constant in 2008, compared to 2007.
Nokia and Nokia Siemens Networks continue to expect the mobile infrastructure and fixed infrastructure and related services market to be flat in Euro terms in 2008, compared to 2007.
Nokia and Nokia Siemens Networks continued cost synergy target for Nokia Siemens Networks is to
achieve substantially all of the EUR 2.0 billion of targeted annual cost synergies by the end of 2008, as
previously announced.