Nokia operating profit and sales up in 2008 but fourht quater results show a negative trend that is expect to continue in 2009.

CORPORATE IT UPDATE-(C)1995-2009 M2 COMMUNICATIONS LTD

Finnish telecomms solutions provider Nokia (NYSE: NOK) reported on Thursday (22 January) an operating profit of EUR7.03bn on net sales of EUR50.7bn for the financial year 2008, with both operating profit and net sales for the 12-month

Nokia mobile device volumes reached 468 million units, an increase of 7%, resulting in an estimated market share of 39%, up from 38% in 2007. Market volume for the same period was estimated at 1.21bn units, an increase of 6%.

Devices & Services divisions net sales in 2008 decreased by 6.9% to EUR35.1bn from EUR37.7bn in 2007, while operating profit decreased to EUR6.37bn from EUR7.59bn.

Net sales for the joint venture Nokia Siemens Networks in 2008 amounted to EUR15.34bn, up from EUR13.4bn in 2007, while the operating profit increased to EUR757m from EUR331m.

Operating profit for the fourth quarter of 2008 amounted to EUR1.24bn on net sales of EUR12.7bn. Both operating profit and net sales for the quarter decreased, respectively from EUR2.63bn and EUR15.7bn, as compared to the corresponding period in 2007.

The company's fourth quarter mobile device volume decreased by 15% to 113.1 million units, resulting in an estimated market share of 37%, down from 40% in the corresponding period in 2007.

Earnings per share (EPS) in the fourth quarter of 2008 amounted to EUR0.26, while the full-year EPS decreased to EUR1.05 from EUR1.83 in 2007.

Operating margin for the full year decreased to 13.9% from 15.1% in 2007. Nokia's board of directors will propose a dividend of EUR0.40 per share for 2008, as compared to EUR0.53 per share for 2007.

Nokia expects industry mobile device volumes in the first quarter 2009 to decline sequentially to a greater extent than the seasonal sequential decrease in the first quarter of the past few years. The company's device market share in the first quarter of 2009 is expected to be at approximately the same level sequentially.

Nokia now expects 2009 industry mobile device volumes to decline approximately 10% from 2008 levels. Nokia expects the decline to be greater in the first half than in the second half of the year.

Nokia and Nokia Siemens Networks continue to expect the mobile infrastructure and fixed infrastructure and related services market to decline 5% or more in Euro terms in 2009, from 2008 levels.

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