16 October 2008

Nokia's third quarter 2008:
Operating Profit Decreased 21%!

Nokia's third quarter 2008 reported operating profit decreased 21% to EUR 1.5 billion, compared with EUR 1.9 billion in the third quarter 2007.

Nokia's 3rd quarter 2008 non-IFRS operating profit decreased 14% to EUR 1.8 billion, compared with EUR 2.0 billion in the third quarter 2007.

Nokia's third quarter 2008 reported operating margin was 12.0% (14.4%). Nokia's third quarter 2008 non-IFRS operating margin was 14.3% (15.7%).

Operating cash flow for the third quarter 2008 was EUR 1.3 billion, compared with EUR 2.0 billion for the third quarter 2007, and total cash and other liquid assets were EUR 7.2 billion at September 30, 2008, compared with EUR 11.8 billion at December 31, 2007. At September 30, 2008, our net debt-equity ratio (gearing) was -18%, compared with -62% at December 31, 2007.

On July 24, 2008, Nokia and Qualcomm entered into a new agreement covering various current and future standards and other technologies, and resulting in a settlement of all litigation between the companies. Under the terms of the 15 year agreement, Nokia has been granted a license under all Qualcomm's patents for use in Nokia's mobile devices and Nokia Siemens Networks infrastructure equipment.

As previously communicated, the financial terms also included a lump-sum cash payment. The payment amounts to EUR 1.7 billion and is payable by Nokia to Qualcomm during the fourth quarter 2008. The lump-sum payment made to Qualcomm will be expensed quarterly over the term of the agreement.

As a result of the agreement with Qualcomm and certain other license agreements concluded during the third quarter 2008, Nokia incurred a slightly positive impact to its gross margin during the quarter, as the royalty provisions earlier recorded well covered the related obligations.