Nokia says Q3 profits on track, Sales to fall but profits firm at leading mobile maker
By Chris Nuttall, FTMarketWatch.com
Last Update: 8:19 AM ET Sept. 11, 2001
LONDON (FTMW) - The world's leading mobile phone maker Nokia (SE:000053994: news, chart, profile) (NOK: news, chart, profile) boosted its stock and global technology markets on Tuesday when it announced it was on track to achieve its third-quarter profit estimates, despite a slight fall in revenues.
Nokia shares rose 12.5 percent on the news to €17.15 in Helsinki, while those of rival Ericsson climbed 7 percent in Stockholm to 44.40 Swedish kronor.
Elsewhere, French equipment maker Alcatel (FR:013000: news, chart, profile) (ALA: news, chart, profile) rose nearly 5 percent to €15 and Philips' (NL:PHIA: news, chart, profile) (PHG: news, chart, profile) shares were 3.5 percent higher at €27.18. See European markets report
Nokia also rose 12 percent in pre-open trading in New York, where rival Motorola (MOT: news, chart, profile) headed 81 cents higher to $15.85. See CBSMarketWatch story
Revenues to fall 5%
In a mid-quarter update, Nokia warned it expected its third-quarter revenues to fall 5 percent year-on-year, compared with earlier expectations of 0 to 5 percent growth. See Nokia statement
The company said it still expected to reach its third-quarter profit estimate made on July 19.
Based on July and August, third quarter operating margin was expected to be in the mid-teens and diluted earnings per share should be within the predicted €0.14-0.16 range, it said.
Nokia pointed to different dynamics governing its mobile phones business, which accounts for more than 70 percent of revenues, and its network infrastructure division.
U.S. demand picks up
Nokia said that, with operators reassessing the timing of their GSM network investments, there would likely be lower year-on-year sales and profitability for its networks division in the third quarter.
But it said mobile phone revenues should be at about the same level, with demand showing signs of picking up in the U.S and the Asian market continuing to show a solid performance.
Nokia's mobile phones president Matti Alahuhta made an upbeat speech about handset sales at an investors' conference in New York last week, at the same time as Ericsson was saying it saw no end in sight to the downturn. See Europe Telecom Daily
Third quarter earnings will be reported on October 19. The company scheduled a conference call for later on Tuesday.
In July, Nokia shares gained 14 percent on the day and boosted European markets when it beat lowered expectations with its second-quarter earnings. |
