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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
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