Nokia in Q4 sales warning
European mobile telecom stocks dipped on Tuesday morning after Finnish bellwether Nokia said that fourth quarter sales may fall below expectations.
Finland's Nokia, which makes about a third of the world's mobile phones, said on Tuesday that it now sees fourth quarter sales for the group at between €8.8bn and €9bn. These estimates should see the company's sales come in at, or slightly below, the earlier sales guidance of between €8.9bn and €9.2bn that was given when Nokia released its third quarter results.
"Handset sales, while being seasonally strong, have tended towards the mass-volume end of the product portfolio in the lead up to the holiday season," the company said in explaining the lower figures.
However, the Finnish giant stuck with its pro forma earnings per share (EPS) estimates of €0.23 to €0.25 for the quarter. Full year pro forma EPS should be in the range of €0.79 to €0.81. "Nokia in addition expects to see significant market share gains for the fourth quarter, compared with the third quarter 2002," the company said.
It also said it was confident that unit shipments within the industry as a whole would match its previous forecast of 400 million.
In Nokia Networks, the side of the company that manufactures mobile phone network infrastructure, the company said that sales are expected to show sequential growth compared with the third quarter. Pro forma operating margins for Nokia Networks are now estimated to be approximately zero for the fourth quarter. These sales estimates include revenue recognition related to dual-mode GSM/WCDMA network equipment of about €400m, based on the assumption that the necessary technology milestones for such recognition are met by the end of the year, the firm said.
Before 11am GMT time on Tuesday, Nokia stock fell by more than 4 per cent in London and by almost 3 percent in Stockholm, with heavy trading on both bourses. Sweden's Ericsson, which makes both handset and network equipment, saw its shares tumble by 7 per cent. Equipment maker Alcatel also saw its shares slide 4.2 per cent lower in France in morning trading.
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