01/30 06:01
Nokia Sees 1st-Qtr EPS Unchanged; Cuts Global
Outlook (Update1)
By Jonas Dromberg and Linda Andersson
Helsinki, Jan. 30 (Bloomberg) -- Nokia Oyj, the world's biggest mobile phone
maker, sees first-quarter earnings per share unchanged from a year earlier as it cut
its sales forecast for the industry. The company's shares fell as much as 9.9 percent.
Profitability at its phone unit, which accounts for about 70 percent of sales, fell in
the fourth quarter from the same period a year earlier amid increased competition.
Nokia now expects worldwide cell-phone sales of 500 million to 550 million this
year, down from an earlier forecast for 550 million phones.
Nokia follows rivals, such as Ericsson AB, in reducing its outlook for global phone
sales as slowing economic growth hurts demand and consumers wait for better
Internet-capable phones before replacing their old phones. Nokia controls a third of
the handset market and is most exposed to the slowdown.
The outlook ``reflects somewhat slower-than-anticipated market growth during the
first quarter and the company's strategy of aggressively gaining market share
especially in mobile phones,'' said Nokia in a statement issued through the Helsinki
exchange.
Nokia shares fell as much as 3.95 euros to 35.90 euros, losing gains made earlier
today ahead of the earnings announcement. The stock had tripled since the
beginning of 1999.
Fourth-quarter profit climbed 41 percent to 1.204 billion euros ($1.1 billion), or
0.26 euro a share, from 853 million, or 0.19 a share, in the year-earlier period.
Analysts surveyed by Bloomberg had estimated 1.1 billion euros on average.
Operating margins in its phone unit fell to 21.3 percent in the fourth quarter from
24.9 percent a year earlier. It said it expects a margin of 20 percent by the fourth
quarter.
``Some people were factoring margins of about 22 percent for the year,'' said Ollie
Beckett, who helps manage about 10 billion pounds ($14.6 billion) at Henderson
Investors in London.
Fourth-quarter operating profit at Nokia's mobile phone unit rose to 1.429 billion
euros from 1.059 billion in the same period in 1999, while sales rose to 6.709
billion euros from 4.246 billion.
In the networks unit, operating profit rose to 388 million euros in the fourth
quarter, up from 334 million a year earlier. Sales in the unit rose to 2.361 billion
euros from 1.740 billion. |
