Nokia said Tuesday that brisk sales of its low-end phones will bring it market share gains in the fourth quarter, but that it could miss its earlier revenue target.
Seasonal handset sales are strong, but users are choosing the cheap mass-market phones and not the more expensive feature-rich units. Fourth quarter revenue at Nokia is therefore expected to be between 8.8 billion (US$8.9 billion) and 9.0 billion, at the lower end or slightly below the earlier guidance of between 8.9 billion and 9.2 billion, Nokia said in a statement.
The company, however, expects "significant market share gains" in the fourth quarter compared with the third quarter, bringing it closer to its aim of 40 percent market share. Nokia held 35.9 percent of the worldwide market in the third quarter, according to research from Dataquest Inc., a unit of Gartner Inc.
Nokia, the world's largest mobile phone maker, expects pro forma earnings per share (EPS) for the quarter to be within the earlier estimated range of 0.23 to 0.25, culminating in a full year pro forma EPS between 0.79 and 0.81, the Espoo, Finland, company said in a scheduled mid-quarter update to its business outlook.
Nokia reiterated its forecast that 400 million handsets will be sold worldwide this year. That forecast is below that of Dataquest, which late last month said it expects between 415 million and 420 million phones to be sold in 2002. Last year about 380 million phones were sold.
Fourth-quarter revenue at Nokia Networks, the division that sells mobile telephony networks to operators, will increase sequentially and likely include recognition of about 400 million in revenue from sales of 3G (third-generation) equipment, Nokia said. However, pro forma operating margins for Nokia Networks are now estimated to be nil for the fourth quarter. In October, Nokia predicted the operating margin of its networks division would remain at the third-quarter level of 5.2 percent.
Pro forma operating margins at Nokia Mobile Phones for the fourth quarter are expected to exceed the 22 percent level of the third quarter, Nokia said. This is an adjustment from the earlier forecast, when Nokia said that margins would be at par with the third quarter.
Shares in Nokia (NOK1V) were down 3.12 percent at 17.38 in mid-afternoon trading at the Helsinki stock exchange Tuesday.
Nokia is scheduled to release its fourth quarter and full year 2002 results on Jan. 23.