Nokia Third-Quarter Earnings to Fall, Shares Decline (Update1)
By Jani Koivula
Espoo, Finland, July 27 (Bloomberg) -- Nokia Oyj said earnings in the third quarter will probably decline from the second quarter, as customers delay mobile-phone purchases awaiting new products. Its shares fell as much as 19 percent.
The outlook overshadowed a 64 percent increase in second- quarter profit, as Europe's No. 2 company by market value strengthened its lead in the mobile-phone business and sold more network equipment.
Nokia, fending off competition from Motorola Inc. and Ericsson AB, has been quicker to introduce colorful phones with more features, designed for different types of consumers. The Finnish company expects the number of cellular users worldwide to double to more than 1 billion by the end of 2002.
The expected drop in third-quarter earnings per share is ``due to the timing of the new product introductions, as well as seasonality ,'' said Jorma Ollila, chairman and chief executive, in a statement.
Nokia shares fell as much as 10.65 euros to 46.50, their biggest drop in four and a half years. The decline dragged down the Bloomberg European Telecommunications Equipment Index, which fell as much as 9 percent from the day's high, and the Bloomberg European 500 Index, which fell as much as 0.1 percent on the day after having been as much as 1 percent higher.
The stock had gained 27 percent since the beginning of the year, compared with 30 percent for the Bloomberg Europe Telecommunication-Equipment Index.
Second Quarter
Second-quarter net income rose to 951 million euros ($894 million), or 0.20 euro a share, from 581 million, or 0.12, in the year-ago period. Nokia was expected to earn 919 million euros, the average estimate of analysts polled by Bloomberg News.
Pretax profit rose to 1.42 billion euros from 877 million, while operating profit climbed to 1.41 billion euros from 881 million. Sales rose 55 percent to 6.98 billion.
Operating profit in the cellular phone unit rose 82 percent to 1.221 billion euros. Analysts said they expected 1.146 billion euros. Sales at the unit rose 67 percent to 4.88 billion euros.
Last year, Nokia had 27 percent of the cell-phone market, followed by Illinois-based Motorola with 17 percent and Sweden's Ericsson with 11 percent, according to Dataquest Inc. |
