Nokia beats expectations for Q1, warns on Q2

Despite a weak mobile telecommunication market, Nokia Corp., the world's largest mobile-phone maker, on Thursday posted better-than-expected earnings for its first quarter, though the Espoo, Finland, company warned that its growth will slow in the second quarter.

Nokia reported net profit of €915 million (US$796 million as of March 31, the last day of the period being reported), or €0.19 per basic share, compared with €1.05 billion, or €0.22 per basic share, in the year-ago period, the company said in a statement.

Analysts polled by Thomson Financial/First Call had pegged Nokia to earn $0.15 per share for the period.

Nokia posted a 12 percent decline in net sales to €7.01 billion, compared to €8.01 billion for the first quarter of 2001, the company said.

The company suffered lower quarterly sales in Europe and the Americas, but that was partially offset by a growth in sales in the Asia-Pacific region, Nokia said.

The company said it believed it has maintained its estimated 37 percent share of the overall mobile-phone market.

As Nokia advised last month, its network business posted a year-on-year decline of 29 percent, mainly due to the slower-than-expected pace of mobile-phone operators in Europe and in China adding second-generation capacity to the networks, the company said.

For the second half of its financial year, Nokia foresees the implementation of 3G (third-generation) technology as having a positive impact of its networks business, the company said.

The handset maker forecasted growth in its second -quarter sales of between 2 percent and 7 percent compared with the second quarter of last year, Nokia said. Second-quarter pro forma diluted earnings per share are expected to be in the €0.18 to €0.20 range, the company said.

Nokia said it is still on track to meet current consensus estimates for its full-year diluted pro forma earnings per share of €0.83.

For the entire mobile market, Nokia has set its yearly volume sales estimates for 2002 at between 400 million and 420 million units, as compared to last year's estimated market volume of 380 million units, the company said. Nokia said it has lowered its market sales estimates due to what it terms general weakness in all key regions.

In terms of future growth, Nokia predicted that Multimedia Messaging Service (MMS) will be the primary revenue driver and, with that in mind, the majority of its mobile devices planned for release next year will be MMS-enabled, Nokia said.