Message-ID: <18829492.1075843866533.JavaMail.evans@thyme>
Date: Thu, 15 Mar 2001 04:42:00 -0800 (PST)
From: jeff.dasovich@enron.com
To: psellers@haas.berkeley.edu
Subject: Nokia Expects to Meet Earnings Forecast Despite Lowered Sales,
 Industry Outlook
Mime-Version: 1.0
Content-Type: text/plain; charset=us-ascii
Content-Transfer-Encoding: 7bit
X-From: Jeff Dasovich
X-To: psellers@Haas.Berkeley.EDU
X-cc: 
X-bcc: 
X-Folder: \Jeff_Dasovich_June2001\Notes Folders\Sent
X-Origin: DASOVICH-J
X-FileName: jdasovic.nsf

Nokia Expects to Meet Earnings Forecast
Despite Lowered Sales, Industry Outlook
Dow Jones Newswires
HELSINKI, Finland -- Despite market conditions that have cut into its sales 
growth, Nokia Corp. said Thursday that it expects to meet its earnings target 
for the first quarter of 2001, thanks to better-than-anticipated profit 
margins.
Nokia estimates it is likely to earn 19 European cents a share in the first 
quarter, in line with estimates it provided in January.
Nokia's shares received a boost from the statement, rising 2.60 euros, or 
11%, to 27.15 euros in early-afternoon trading in Helsinki. In midday trading 
in the U.S., shares of Nokia were up $3.20, or 15%, to $25 on the New York 
Stock Exchange.
The company said it expects year-on-year sales growth in its networks 
division during the first quarter to be 30% to 35%, and 15% to 20% in the 
mobile-handsets division. Total sales growth is expected to be around 20%, 
the company said.
That is lower than the 25% to 30% sales growth the company forecast in 
January, when it released full-year results for 2000. The company said it has 
had to confront "difficult market conditions," particularly in the U.S.
"We feel confident about our strengths and our performance during the early 
months of the year," Nokia Chairman and Chief Executive Jorma Ollila said. 
"Despite the more difficult market conditions, we have been able to show good 
progress. We expect to see solid growth for the first quarter as a whole, 
with better-than-anticipated margins."
As a result of the tougher conditions, Nokia said it now expects global 
handset sales for 2001 to be between 450 million and 500 million units. It 
had previously forecast a range of 500 million to 550 million units, saying 
sales near the bottom end were more likely.

1Motorola Announces More Job Cuts In Wireless-Phone Handset Business (March 
14)
2Ericsson Issues Profit Warning Amid Sagging Economy, Sales (March 13)
3Ericsson to Outsource Handset Sector to Stem Losses in Consumer Goods (Jan. 
29)

Just last year, manufacturers were expected to sell about 650 million 
cellphones world-wide in 2001, but the industry is slumping as many consumers 
delay buying or upgrading their phones.
Nokia's statement comes three days after Swedish rival Telefon AB L.M. 
Ericsson warned that it expected a substantial loss in the first quarter 
because of slowdowns in both its handset and networks businesses.
And Motorola Inc. of the U.S. said Tuesday that it will slash 7,000 jobs in 
its cellphone- and pager-manufacturing business, and will take a 
still-unspecified charge against first- and second-quarter earnings.
Including the latest cuts, Motorola has set plans to eliminate 18,000 jobs 
since December, or 12% of its 147,000-member work force.
Ericsson, meanwhile, has taken the unusual step of deciding to outsource its 
entire phone production to a third party -- a major retreat by a company once 
famous for manufacturing the most-sophisticated cellular phones in the world.
Nokia said it has reacted to the changing market conditions by accelerating 
programs to improve efficiency and cut costs, but it didn't provide details.
The company also said it has widened its market share in the handset market 
above the 32% it achieved in 2000. And it said its own stock levels, as well 
as the stock levels of Nokia phones already shipped to stores, are lower than 
at the end of 2000.
"More challenging times like these test your mettle as a company," Mr. Ollila 
said. "We believe that truly great companies emerge from challenging times 
much stronger."
The company said it would comment further on its performance on April 20, 
when it releases first-quarter results.
URL for this Article:
http://interactive.wsj.com/archive/retrieve.cgi?id=SB984654324403927366.djm

Hyperlinks in this Article:
(1) 
http://interactive.wsj.com/archive/retrieve.cgi?id=SB984492874612250695.djm 
(2) 
http://interactive.wsj.com/archive/retrieve.cgi?id=SB98440752335536227.djm 
(3) 
http://interactive.wsj.com/archive/retrieve.cgi?id=SB980501096275845838.djm