Nokia Is Unraveling Faster Than Anyone Imagined

NEW YORK (TheStreet) -- Here's the operative thought: Nokia's (NOK) business is becoming unstitched faster than anyone imagined. The Finnish phone maker, which is getting trounced by Apple (AAPL) and Google (GOOG), announced plans yesterday for 10,000 firings, about a fifth of their employee base, as well as management changes.

They also cut earnings estimates. Again. You got that? Again. As in: for the second time in nine weeks. That's a rarity -- and an essential indicator.

But to most of the media, it's just another cut. Same old, same old. Forbes mentions the second quarter cut in both their headline and second sentence, but never mentions the fact that this is a double-dip cut. The Associated Press touched its toe in the past, mentioning the horror show that was Nokia's April earnings, but also failed to mention the estimate cut. Marketwatch was also mum.

Fittingly, Reuters got there right from the start:

"In a second profit warning in nine weeks, Nokia said on Thursday that its phone business would post a deeper-than-expected loss in the second quarter due to tougher competition."

This is a defining fact that can mean several things, none good. Industry forces might mean Nokia's business is simply unspooling faster than anyone thought. Management might also be clueless, with no sense of where they stand. Or they might be engaged in the last act of a desperate company: telling the truth slowly. In other words, they're delivering terrible news in stages, so it doesn't seem so bad.

Any way you slice a second estimate cut in nine weeks, it's not good. That's why you have to mention it prominently.

At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.

Marek Fuchs was a stockbroker for Shearson Lehman Brothers and a money manager before becoming a journalist who wrote The New York Times' "County Lines" column for six years. He also did back-up beat coverage of The New York Knicks for the paper's Sports section for two seasons and covered other professional and collegiate sports. He has contributed frequently to many of the Times' other sections, including National, Metro, Escapes, Style, Real Estate, Arts & Leisure, Travel, Money & Business, Circuits and the Op-Ed Page.

For his "Business Press Maven" column on how business and finance are covered by the media, Fuchs was named best business journalist critic in the nation by the Talking Biz website at The University of North Carolina School of Journalism and Mass Communication. Fuchs is a frequent speaker on the business media, in venues ranging from National Public Radio to the annual conference of the Society of American Business Editors and Writers.

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