Nokia reported sales of 93.2 million mobile phones in the first quarter, down 19 percent year-on-year and down 18 percent from Q4. Nokia underperformed the broader market, as the company estimates global mobile device sales of 255 million in the quarter were down 14 percent from a year ago and down 16 percent from Q4. The company's highlight for the quarter was the XpressMusic 5800 phone, which has shipped over 3 million units since launching last November. Nokia's average selling price dropped to EUR 65 per phone in Q1, from EUR 71 in Q4 and EUR 79 a year ago, as consumers shifted to cheaper handsets and Nokia saw a decline in its smartphone sales. On a geographic basis, handset sales were down 13.2 percent year-on-year in Europe to 22.3 million and fell 17.3 percent in Asia-Pacific to 28.2 million. North America was the only growth area, where sales rose 31 percent to 3.4 million phones. Nokia estimates its global market share was unchanged versus Q4 at 37 percent, and the company forecast a sequential increase in market share in Q2.
Overall, the devices and services division posted Q1 sales down 33.4 percent to EUR 6.173 billion and operating profit down 71.0 percent to EUR 547 million. Nokia said it's on track to cut EUR 700 million from operating costs at the division by 2011, with much of the reduction to come this year. Following the reduction in inventories in sales channels in Q1, Nokia expects a more predictable market in Q2. The company forecast industry handset volumes in Q2 to be flat to slightly higher versus the first three months of the year. The Finnish company maintained its full-year outlook for the global mobile phone industry to show a 10 percent volume decline in 2008, with a bigger contraction in H1 than H2.
Nokia's total first-quarter revenues fell 26.7 percent from a year earlier to EUR 9.274 billion, while operating profit plunged to EUR 55 million from EUR 1.531 billion a year ago. EPS dropped to EUR 0.03 from EUR 0.32, reflecting the weaker handset market, a number of restructuring and impairment charges as well as operating losses at Navteq and Nokia Siemens Networks. Operating cash flow fell to EUR 276 million from EUR 757 million a year ago, while the company finished March with a total EUR 8.1 billion cash.
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