Nokia Scales Back 1st-Quarter Profit, Sales Forecasts (Update2)
By Ville Heiskanen
Espoo, Finland, March 11 (Bloomberg) -- Nokia Oyj, the world's biggest mobile-phone maker, scaled back first-quarter earnings and sales forecasts as demand for network equipment slumps and handset sales stall. The Finnish company's stock fell.
Nokia expects earnings, excluding certain costs, of 15 euro cents ($0.17) to 17 cents a share, it said in a Helsinki exchange release. That compares with a January forecast of 15 cents to 19 cents. Sales at its network business will drop 15 percent to 20 percent, leading to a ``substantial operating loss'' at the unit.
``There just isn't any demand for networks,'' said Michael Schroeder, an analyst at Opstock Securities, with an ``accumulate'' rating on the stock.
Nokia has eliminated 9,000 jobs, or 15 percent of the total, over the past two years and negotiated lower prices for parts to bolster profit as demand cooled. The company's sales fell for the first time in a decade last year as demand for handsets with new features failed to pick up and phone companies such as France Telecom SA curbed spending.
``First-quarter sales for the Nokia group are expected to be slightly down year on year,'' the company said.
Sales at the mobile-phone unit will come in at the lower end of Nokia's previously estimated range of revenue being unchanged to rising 9 percent from the year-earlier quarter, it said.
Nokia said the network unit's reported operating result will be helped by an increase in the valuation of the former MobilCom AG receivables of about 220 million euros. The change in valuation will also have a positive effect on Nokia's reported EPS, it said.
Nokia shares fell as much as 89 cents, or 7.8 percent, to 10.55 euros, and traded at 10.74 euros as of 12:42 p.m. in Helsinki. Shares of rival Ericsson AB fell as much as 15 percent to 4.11 kronor in Stockholm.
(To listen to a conference call about Nokia's mid-quarter update, starting at 2 p.m. CET, call +1 706 634 5012 or go to www.nokia.com/Investor to view an audio Web cast. Go to www.nokia.com/cebit2003 to view a Web cast of Nokia's press conference at Cebit technology fair, also starting at 2 p.m. CET.) |
