RPT-UPDATE 1-Nokia says to meet Q3 profit goal, stock up 15 pct
(UPDATE: Adds Nokia comments, share price reaction, background)
By Paul de Bendern
HELSINKI, Sept 11 (Reuters) - Nokia , the world's largest mobile phone maker, on Tuesday said it would meet third-quarter earnings guidance despite weak markets which had dented sales, sending its shares as much as 15 percent higher.
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Nokia said it would meet its pro forma earnings per share (EPS) guidance of 0.14-0.16 euros ($0.13-0.14) for the third quarter, but warned it would miss its sales target of flat-to-five percent growth year-on-year.
Instead, it said sales would fall five percent from the 7.58 billion euros level reached in the third quarter of last year.
Investors, who pushed down Nokia shares some 40 percent since late July on worries the Finnish company would not meet its guidance, sent Nokia 13.4 percent higher to 17.30 euros by 1153 GMT on Tuesday.
Nokia's statement, similar to the pre-announcement it made ahead of its second-quarter result, came only days after U.S. rival Motorola (NYSE:MOT - news), the world's second largest mobile phone maker, warned of lower third-quarter sales.
It also came on the heels of comments from rival Ericsson that sent shivers through the already battered technology market when the Swedish company said it did not see any clear signs of a recovery in the market next year.
``Based on developments during the first two months of the quarter, third quarter pro forma operating margin for the Nokia group is expected to be in the mid-teens,'' Nokia said in a statement.
Nokia will report third-quarter earnings on October 19.
Nokia said sales at its key mobile phone division, which makes up about 70 percent of total sales, would be at the same level as the third quarter last year.
``Nokia Mobile Phones has been able to maintain healthy margins,'' Nokia said. ``Demand is showing signs of picking up in the U.S. and the Asian market continues to show a solid performance,'' it added.
But the company struck a more pessimistic note for its networks equipment division, indicating it was suffering like its rivals Ericsson, Motorola and Nortel (Toronto:NT.TO - news) from fewer orders from operators hit by the slowdown in the economy and high debts linked to third-generation licences in Europe.
``This is expected to result in lower year-on-year sales and profitability for Nokia Networks in the third quarter,'' it said.
Nokia will hold a conference call at 1300 GMT. Contrary to the norm, Nokia announced in advance that it would also give a mid-quarter update for the fourth quarter on December 11 |
