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Technology Stocks : Nokia (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (15832)	10/16/2001 9:56:54 AM
From: JohnG	Respond to of 34857

Nokia Third-Quarter Profit Seen Declining 26%: Earnings Outlook By Jonas Dromberg and Juho Erkheikki Espoo, Finland, Oct. 16 (Bloomberg) -- The following is a summary of expected third-quarter earnings from Nokia Oyj, the biggest maker of cellular phones. Expected Earnings Finland's largest company will probably say third-quarter net income fell 26 percent to 686 million euros ($621 million) from a pro forma 923 million in the year-earlier period, according to the average estimate in a survey of 11 analysts by Bloomberg News. Nokia has been using pro forma figures since the beginning of the year because of a change in accounting methods. Estimates ranged from 584 million to 752 million with a median of 695 million euros. Analysts expect a 25 percent drop in pretax profit to 1.03 billion. Operating profit at the cellular-phone unit probably fell 12 percent to 916 million euros, while sales slid 1 percent to 5.39 billion euros, analysts predicted. They expect the network unit to post a 36 percent drop in operating profit to 226 million euros and a sales decline of 13 percent to 1.67 billion euros. Expected Reporting Time The Espoo-based company releases the earnings report on Oct. 19 at noon Helsinki time. Behind the Numbers Nokia said Sept. 11 it would meet its forecast for third- quarter profit of between 14 euro cents and 16 cents a share, helped by cost cuts, even as sales decline. The company reduced its sales projection for the quarter to a decline of 5 percent from a previous estimate of an increase of as much as 5 percent. Industry shipments of cellular phones may fall this year for the first time in more than two decades, analysts said. Nokia expects little changed sales from last year, when 405 million phones were sold. Motorola Inc., which ranks behind Nokia in handset sales, last week predicted that manufacturers will sell 380 million to 400 million mobile phones worldwide in 2001. For next year, Nokia has said it will reach sales growth of between 25 percent and 35 percent at some point. Cooling demand for network equipment and phones will probably prompt a reduction of that projection, some analysts said. Also, Nokia may have lost part of its 35 percent market share in handsets during the third quarter as rivals introduced new phones and lowered prices, they added. To fight competition from Motorola and Ericsson AB, Nokia last week introduced a new model aimed at game-playing youths. The 5510 phone includes a digital music player, a radio and games. Nokia is the only profitable handset maker out of the top three. Also, Nokia may be helped by a boost in industry sales of mobile phones after last month's terrorist attacks on the U.S., as people want to be in contact with their family members and friends. The Finnish company gets 70 percent of its sales from handsets. Sales growth at Nokia's network business is easing and profitability is shrinking after clients curb investments after spending $100 billion on new mobile licenses in Europe last year. Ericsson, the top maker of wireless telephone networks, expects the market for such equipment to be little changed through 2002. What the Experts Say ``The biggest problem is the market conditions,'' said Michael Schroeder, an analyst at Opstock Securities in Helsinki. ``Still, Nokia has weathered it better than its rivals.'' Chief Executive Officer Jorma Ollila ``must introduce new products that excite consumers once again,'' said Esa Mangeloja, an analyst at Conventum Securities, who rates the stock ``accumulate.'' ``Mobile phones are something of the past.'' Stock Performance The company's shares have fallen 56 percent this year on expectations demand will slow. Since the day before the U.S. terrorist attacks, the stock has risen 38 percent. Previous Market Reaction Nokia shares soared 14 percent on July 19, when the company posted second-quarter profit at the top end of its reduced forecast and said earnings will rebound in the fourth quarter. Net income dropped to 830 million euros from 984 million euros. Access More Information and Services Above ©2001 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks.