Nokia reports fourth quarter 2006 net sales of EUR 11.7

Nokia reports fourth quarter 2006 net sales of EUR 11.7 billion, EPS of EUR 0.32 and Nokia reports 2006 net sales of EUR 41.1 billion, EPS of EUR 1.05Nokia achieves record quarterly and annual device volumes, net sales and EPSNet sales grew 13% in Q4 and 20% in 2006 EPS grew 28% in Q4 and 27% in 2006 Nokia Board of Directors will propose a dividend of EUR 0.43 per share for 2006 (EUR 0.37 per share for 2005) The complete press release with tables is available at: http://www.nokia.com/results/results2006Q4e.pdf NOKIA Q4 and 2006 EUR millionQ4/2006Q4/2005 Change (%)2006 2005Change (%)Net sales11 70110 3331341 12134 19120 Mobile Phones7 0766 2171424 76920 81119 Multimedia2 1362 02467 8775 98132 Enterprise Solutions305153991 03186120 Networks2 1841 951127 4536 55714Operating profit1 5191 368115 4884 63918 Mobile Phones1 2571 060194 1003 59814 Multimedia326 31051 31983658 Enterprise Solutions-64-136 -258-258 24.833.9 Middle East & Africa15.510.350.513.316.5 China14.69.553.713.85.8 Asia-Pacific23.714.860.120.913.4 North America5.99.8-39.85.81.7 Latin America12.59.433.09.926.3 Total105.583.725.988.519.1 Nokia's estimated market share for the fourth quarter 2006 was 36%, flat sequentially and up from 34% in the fourth quarter 2005. On a sequential basis, Nokia gained market share in Europe. This gain was offset by market share declines in Latin America, North America and Asia-Pacific, while our market share in China and Middle East & Africa remained virtually unchanged sequentially. On a year on year basis, Nokia gained market share in every area except North America in the fourth quarter 2006. The average selling price of Nokia's mobile devices declined in the fourth quarter 2006 to EUR 89, compared to EUR 93 in the third quarter 2006 and EUR 99 in the fourth quarter 2005. Sequentially, our ASP was impacted by a lower percentage of sales from our higher end products, specifically from our Multimedia business group, that more than offset the relatively stable ASPs in our entry-level product sales. The year on year decline in our ASP was driven primarily by the strong growth of the emerging markets, which have lower ASPs, and the growth of Nokia's market share in those markets, in addition to which certain higher-end products in our portfolio were not viewed as sufficiently competitive in various markets. Mobile Phones: Fourth quarter 2006 net sales grew 14% to EUR 7.1 billion, compared to EUR 6.2 billion in the fourth quarter 2005. Net sales growth was driven by strong volume growth, especially in the entry level, and Nokia's ability to capture incremental volumes with its competitive entry-level product portfolio and strong logistics. Volume growth was partially off-set by declining ASPs. Net sales growth was strongest in Latin America, followed by Asia-Pacific, Middle East & Africa, Europe and China. Net sales declined significantly in North America, driven primarily by the continued lack of broad acceptance of certain products in our portfolio, and lower volumes in our CDMA business. Mobile Phones fourth quarter 2006 operating profit increased 19% year on year to EUR 1 257 million, compared to EUR 1 060 million in the fourth quarter 2005, with an operating margin of 17.8% (17.1%). The strong operating profit growth was driven by strong net sales and effective operating expense control. Multimedia: Fourth quarter 2006 net sales grew 6% to EUR 2 136 million, compared to EUR 2 024 million in the fourth quarter 2005. Multimedia continued to benefit from good sales of Nokia Nseries multimedia computers, but net sales were somewhat affected by the delay in ramp up of new products. Net sales growth was strongest in Latin America, followed by China, Asia-Pacific and Middle East & Africa. Net sales decreased in North America and Europe. Multimedia fourth quarter 2006 operating profit grew 5% to EUR 326 million, compared to EUR 310 million in the fourth quarter 2005, with an operating margin of 15.3% (15.3%). Operating profit in the fourth quarter 2006 reflected the challenges noted above, but also benefited from effective operating expense control. Enterprise Solutions: Fourth quarter 2006 net sales increased 99% to EUR 305 million, compared to EUR 153 million in the fourth quarter 2005. Net sales in the fourth quarter 2006 were driven primarily by e special items of EUR 142 million), compared to EUR 3.6 billion in 2005. The business group's operating margin was 16.6% (17.3%). The increase in operating profit was driven by strong net sales and effective operating expense control. Operating profit was negatively impacted by a lack of broad acceptance of certain higher end products in our portfolio. MultimediaIn the Multimedia business group, 2006 net sales increased 32% to EUR 7.9 billion, compared to EUR 6.0 billion in 2005. At constant currency, Multimedia net sales would have increased 27% in 2006. Net sales were driven by a robust overall device market supporting sales of more than 16 million Nokia Nseries multimedia computers during the year, led by the Nokia N70 and Nokia N73. Net sales growth was strongest in China followed by Asia-Pacific, Latin America, Middle East & Africa and Europe. Multimedia net sales declined in North America and continued at a low level in 2006. Multimedia's operating profit in 2006 increased 58% to EUR 1.3 billion, compared to EUR 836 million in 2005 (including net positive special items of EUR 4 million). The business group's operating margin was 16.7% (14.0%). The increase in operating profit reflected the increase in sales of our Multimedia products and effective operating expense control. Enterprise SolutionsIn the Enterprise Solutions business group, 2006 net sales increased 20% to EUR 1.0 billion, compared to EUR 861 million in 2005. At constant currency, Enterprise Solutions net sales would have increased 17% in 2006. Net sales growth was highest in China, North America, Europe, Latin America and Asia-Pacific. Net sales declined in Middle East & Africa. The Nokia Eseries sold almost 2 million units since its introduction in the second quarter 2006. Enterprise Solutions operating loss of EUR 258 million (including a EUR 8 million restructuring charge) was flat in 2006, compared to 2005. 2005 operating profit included a EUR 29 million restructuring charge. In 2006, higher net sales and effective operating expense control were off-set by the negative impact of a mix shift to lower-end products. NetworksIn the Networks business group, 2006 net sales increased 14% to EUR 7.5 billion, compared to EUR 6.6 billion in 2005. At constant currency, Networks net sales would have increased 12% in 2006. Strong net sales growth in Middle East &