Q2 Guidance & Market Reaction
>> Nokia Expects EPS Within Guidance for the Second Quarter
Nokia
June 10, 2003
Nokia today provided a scheduled mid-quarter update to the company's business outlook for the second quarter 2003.
Based on developments in the first two months of the second quarter, pro forma EPS (diluted) for the Nokia group is expected to be within the previously guided range of EUR 0.13 and EUR 0.16. This largely reflects continued strong mobile phone operating margins and includes a previously stated restructuring charge of EUR 350 to 400 million in the company's network infrastructure business. Nokia's reported EPS (diluted) is expected to be between EUR 0.12 and EUR 0.15.
In mobile phones, second-quarter sales growth is expected to be positive but at the low end or below the guided range of 4% to 12% year on year, with sales growth slightly less for the Nokia Group. Sales reflect continued general economic weakness in Europe and the US, the impact of currency fluctuations, and the effect of SARS on consumer behaviour, especially in China. At Nokia Mobile Phones, strong profitability is expected to continue. Nokia's market share for the second quarter is estimated to be higher than the first quarter, 2003.
Second-quarter sales at Nokia Networks are estimated to decrease by 0 to 5% year on year, as operators in all major regions continue to decrease their investments. Pro forma operating profit for Nokia Networks, if the restructuring charge were excluded, is estimated to be close to breakeven in the second quarter. <<
Market Reaction:
>> Eurostocks Climb on Relief Over Nokia
London
Reuters
June 10, 2003
Relief that a trading update from Nokia did not spring any nasty surprises buoyed European technology shares and helped the region's leading stock markets move ahead on Tuesday.
Shares in Finland's Nokia traded 1.5 percent higher after the world's largest mobile phone maker warned, as was widely expected by investors, that sales at its main handset unit could be weaker than expected in the second quarter due to the weak dollar and economy as well as SARS.
Nokia said sales growth at its main mobile phones unit was seen at the low end of or below an earlier forecast of four to 12 percent, but positive. Strong profitability was expected to continue.
Nokia said it saw second-quarter proforma diluted earnings per share at 0.13-0.16 euros, flat on a previous forecast.
"Nokia's figures are largely unremarkable," said Simon Hallet, ING Barings TMTs fund manager in London.
"They are slightly cautious on revenues but that was expected given SARS and the environment so this is not particularly concerning."
Analysts said there was good news in Nokia's networks division with sales forecasts for the April-June period slightly above most market expectations.
"Within Nokia's figures there was a nice surprise from the networks division, we had expected sales to be down five percent in the second quarter," said Thomas Langer, a telecom equipment maker analyst at WestLB Panmure.
"This has helped them maintain their guidance range for EPS in the second quarter."
European peer Alcatel and Ericsson added two and four percent respectively on the news after the sector was spooked by a profit warning from U.S. giant Motorola on Monday.
In Helsinki, the HEX general index was up 0.2 percent at 5,679 points.
By 5:25 a.m. EDT, the FTSE Eurotop 300 index was up 0.35 percent at 849 points and the narrower DJ Euro Stoxx 50 index was up 0.64 percent at 2,404 points.
The benchmark Eurotop has rallied 9.3 percent in the past two weeks, breaking even for the year and rising above the top end of an eight-week trading range, as investors started to price in expectations of better economic times ahead. <<
- Eric - |
