Tue, Feb 06, 2001 EST
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Nokia Posts Strong Fourth-Quarter Earnings
By Matti Huuhtanen   Associated Press
HELSINKI, Finland — Nokia, the world's largest cell phone maker, posted a 41 percent increase in profit for the fourth quarter, helped by continued strong growth in handset sales, but it said growth may be slower than expected in the first quarter.

The growth projection sent Nokia shares down 8.4 percent to 36.40 euros ($33.39) by midday Tuesday on the Stockholm stock exchange.

Nokia said its net profit for the three months ended Dec. 31 was 1.2 billion euros ($1 billion), up from 853 million euros in the same period the previous year.

Sales climbed 46 percent to 9.3 billion euros ($8.3 billion) for the three months, up from 6.4 billion euros the previous year.

The wireless equipment maker said mobile phone division sales rose 35 percent to 1.4 billion euros ($1.2 billion) in quarter and 57 percent to 4.8 billion euros ($4.3 billion) for the year.

"In mobile phones, we comfortably achieved all our full-year targets and advanced our number one market share position," Nokia said in a statement. "In 2000, we grew faster than the market during every quarter and in every region."

But Nokia was more cautious about the near future, saying it sees first quarter sales growth of between 25 percent and 30 percent — slower than expected.

It also modified its 2001 unit sales forecast from 550 million units to between 500 million and 550 million units. It added that market growth for the second half is likely to be stronger than for the first.

"The anticipated shift in the mobile phone industry is now taking place and market growth is gradually settling into less exceptional levels than we have seen in the near past," Nokia chief executive Jorma Ollila said in a statement.

The warning comes on the heels of an announcement on Friday by Nordic rival LM Ericsson that it will transfer the production of its handsets to Singapore-based Flextronics International and focus on developing technology for mobile devices that can access the internet.

Nokia's net profit for the full year was 3.9 billion euros ($3.5 billion), up from 2.6 billion euros in 1999. Revenues for the year rose 54 percent to 30.4 billion euros ($27 billion).

The company, with headquarters in Espoo, just outside of Helsinki, has more than 60,000 employees and sales in 130 countries.

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