In a year that has been full of storm clouds for the telecommunication market, Nokia Corp. has announced a silver lining in its midquarter update. The company said on Tuesday that it expects to meet or slightly exceed its fourth-quarter estimates.
Based on sales in October and November, estimated fourth-quarter net sales will be about 20 percent higher than in the third quarter, the company said in a statement.
But compared to last year's figures, the numbers don't look quite as rosy. While net sales in Nokia's networks division are also expected to be up about 20 percent compared to the third quarter of 2001, they are also forecasted to be 20 percent lower than in the fourth quarter of 2000, Nokia said.
In the fourth quarter of 2000, the Finnish mobile phone maker termed its results at the time as "nothing short of extraordinary," with a reported net profit of 1.2 billion euros (US$1.04 billion as of Dec. 31, 2000, the last day of the quarter reported), or 0.25 euros per share.
Nokia estimated that its fourth quarter 2001 pro forma earnings per share will be at the high end or even above its previous fourth-quarter estimate of between 0.18 euros and 0.20 euros per share. However, a consensus estimate of analysts polled by First Call/Thomson Financial predicted lower earnings of 0.17 euros per share.
So far in its fourth quarter, Nokia has seen "strong" sales of the Nokia 8310 -- its GPRS (General Packet Radio Service) handset complete with a plug-in music player -- as well as "brisk" sales in its TDMA (Time Division Multiple Access) and CDMA (Code Division Multiple Access) markets in the U.S., the company said. Largely on the basis of those markets, Nokia predicted that fourth-quarter sales in its mobile phone division will rise 25 percent over its third-quarter sales.
Sales in Nokia's mobile phone division in the third quarter were 269 million euros, compared to 456 million euros in the third quarter of 2000, the company reported in October. The company expects that 105 million to 110 million mobile phones will be sold across the entire market in the fourth quarter, with the highest growth, compared to the third quarter, coming in the Americas and Europe, Nokia said. All of its estimates are in line with the previous fourth-quarter estimates, Nokia said.
Just last month, Nokia lowered its forecast for the yearly worldwide sale of mobile phones to about 380 million units from its previous forecast of 390 million.
At the time, Nokia had said that it didn't expect to see a substantial jump in unit sales due to the Christmas holiday. But looking beyond Christmas, the company did expect to see a sales pickup in 2002 with worldwide total market mobile phone sales of between 420 million and 440 million handsets. That would represent a year-on-year market-volume growth of between 10 percent and 15 percent, Nokia said.
On Tuesday, Nokia confirmed that pricing in the mobile-phone market appeared to stabilize in the fourth quarter, while channel inventories normalized.
In late-morning trading on the Frankfurt stock exchange, Nokia's (NOA3.FRA) shares were up by 1.6 euros per share to trade at 28.45 euros per share, an increase of 5.96 percent.