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To: 2MAR$ who wrote (757)	6/12/2001 1:20:21 PM
From: 2MAR$	Respond to of 26752

DJ THE SKEPTIC: Nokia Warning Likely Marks Worse To Come By Robb M. Stewart A DOW JONES NEWSWIRES COLUMN LONDON (Dow Jones)--If the best of the bunch still disappoints, what hope is there from the rest? Nokia (NOK) has admitted things are worse than forecast and that second-quarter sales and earnings will fall short of previous growth targets. That doesn't bode well for its competitors or for anybody else in the sector. The warning wasn't entirely unexpected as some analysts were looking for Nokia to lower expectations with quarterly figures next month but the news was still a body blow for the shares of telecoms equipment suppliers everywhere. The Finnish company is the leader in mobile handsets with a 35% market share so what Nokia has to say carries a lot of weight. While rivals were showing flat or negative revenue growth, much was made by analysts and investors of Nokia when in April it pointed to 20% growth for its second quarter. But it's now expecting something less than 10% growth and no estimates for the second half of the year will be disclosed until July 19. Whatever pain Nokia is feeling (and it indicates the second half will be little better), its weaker rivals must also be feeling it at least equally. And that follows on down through the supply chain. There's every likelihood that the worst is far from over and that should be the warning to investors, particularly those eager to believe the tide in telecoms is due to turn. Nokia points to a market deteriorating on a mix of economic uncertainty, the transition to next generation technology and less aggressive marketing by the telecoms operators. It will take the successful implementation of 3G to turn that around, but the timetable for rollout remains vague and even then it is far from certain when 3G will produce profits. Nokia, according to consensus figures from JCF Group, began trading Tuesday on a forward PER of 38.5X and a 2002 PER of 31.2X. That's a comparable valuation to Motorola (MOT) - 32.7X for 2002 - and Ericsson (ERICY) - 30.5X. Analysts are still crunching their forecasts so it remains to be seen if a 20% tumble in Nokia's shares, and smaller declines in its rivals stock, rebalances valuations. But, even so, with investors willing to bid Nokia down more than 20% in a day and no company able to point confidently to a turnaround, it surely can't be the end to trading volatility. -By Robb M. Stewart, Dow Jones Newswires; 44-20-7842-9294; robb.stewart@dowjones.com (END) DOW JONES NEWS 06-12-01 01:19 PM * end of story *