Nokia Corp has warned that fourth-quarter sales could miss its earlier guidance and that handset sales have tended to be at the low end of the market. Competitors such as Sony Ericsson and Alcatel also saw their share prices hammered on the basis that if Nokia is suffering, its rivals will be faring far worse.
Espoo, Finland-based Nokia, which currently has an estimated 35.9% share of the handset market, said it expects to see significant market share gains for the fourth quarter in every market except the Americas. It said it is sticking by its earlier forecast that the world handset market will be 400 million units in 2002.
With its first phones with color screens just appearing on the market, and customers yet to flock for phones with digital cameras, Nokia said that handset sales, while seasonally strong, have tended to be at the mass-market end of its product line. The company said it expects fourth-quarter sales to be in the 8.8bn to 9bn euros ($8.9bn to $9.1bn) range, which will be at the low end or miss its earlier guidance of a figure in the 8.9bn to 9.2bn ($8.9bn to $9.3bn) range. It is sticking by its earlier forecast that pro forma earnings per share will be in the range of 0.23 to 0.25 euros ($0.232 to $0.252) bringing the full-year figure to 0.79 to 0.81 euros ($0.797 to $0.818).
The company said that profitability at Nokia mobile phones continues at very healthy levels with pro forma operating margins above the third-quarter levels. While Nokia’s network sales are likely to show sequential growth, operating margins are expected to be zero, compared with its earlier estimate of 5%.
The network unit has been hard hit by the slowdown in investment by mobile operators. Nokia expects revenue to be about 400m euros ($404m) for dual-mode GSM/WCMDA network equipment, provided it meets the necessary technological milestones.