Nokia issues Q2 warning, citing US slowdown

Telecommunication equipment maker Nokia issued a profit warning on Tuesday for its second quarter, which closes at the end of the month, pointing to a continued U.S. economic slowdown that is spreading to other regions.

The company estimates its year-on-year sales growth in its mobile phone handset market will be below 10 percent for the second quarter, down from its earlier estimates of 20 percent growth, Nokia said in a statement. Nokia blamed slow mobile phone sales on a general market deterioration which it said is being driven by economic uncertainty, the ongoing technology transition to third generation (3G) and less aggressive marketing by network operators.

In March, Nokia also lowered its previous sales expectations for the first quarter, though it ended up beating its own lower expectations. In April, the company posted net profit of 1.05 billion euros (US$940 million), an increase of 15 percent over the 910 million euros reported in the first quarter of 2000. For the second quarter, Nokia expects diluted pro forma earnings per share of between 0.15 euros per share and 0.17 euros per share, compared to earlier estimates of about 0.20 euros per share, Nokia said.

The company also expects sales of mobile handsets to recover in the second half of 2001, Nokia said.

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