Nokia Takes Cautious View on Handsets

Shares of Nokia were losing 23 cents, or 1.3%, to $17.73 in Instinet trading before the opening bell.

Analysts polled by Thomson First Call are looking for Nokia to earn 18 cents a share in the second quarter, with revenue of $7.6 billion.

On Monday, a Friedman Billings Ramsey analyst had said Nokia would likely "tighten" its revenue outlook to the downside considering the recent dollar/euro exchange rate, while maintaining its profit guidance. The analyst also speculated that the company would take down its 2003 mobile phone forecast because of growing inventories in Asia and the SARS outbreak. UBS PaineWebber expressed similar views.

In April, Nokia predicted a 15% decline in 2003 network infrastructure sales. At the time, the company predicted sales in its handset segment would rise 4% to 12%, and Nokia offered the second-quarter operating earnings view reiterated Tuesday. Nokia's cell-phone sales rose 1% in the first quarter, and it sold 98 million handsets.

Two months ago, the company projected industrywide handset sales growth of 10% in 2003, but Nokia didn't offer any guidance in that regard in its latest update.

On Monday, Motorola (MOT) blamed this spring's SARS epidemic and the company's outdated phones for weak sales in Asia. Motorola reduced its second-quarter sales and earnings guidance, and the outlook sent that company's shares down 21 cents to $8.68 at the 4 p.m. close of New York Stock Exchange trading.

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