hushed jittery investors in its midquarter update before the market's open Tuesday as it reconfirmed previous guidance for its fourth quarter and prepared them for better-than-expected earnings. As they feared a warning, Nokia gave the market a slight upside surprise.
The world leader in mobile phones says it will hit the high end of its earnings range of 16 cents to 18 cents per share, or possibly exceed that number.
"Clearly, this very much relates to the development in the handset division, i.e., very healthy ASP (average selling price development), gaining market share and the product mix situation. A combination of several factors made us change the tone there," Chief Financial Officer Olli-Pekka Kallasvuo explained Tuesday.
Nokia reiterated its plans to grow total revenue 20% from the third quarter's $6.53 billion, to $7.84 billion, with mobile-phone sales growing 25% sequentially from $4.88 billion. Revenue in the troubled wireless equipment segment will improve 20% sequentially from $1.5 billion in the third quarter. The Street expects $7.5 billion in revenue and 17 cents-a-share earnings in the fourth quarter, for a $27.6 billion and 66 cent profit finish to 2001, according to estimates at Multex.com.
On Nov. 27 Nokia riled up the market with a slightly reduced forecast for total 2001 mobile-phone shipments, as it dropped its full-year projections from 390 million phones to 380 million phones. On Tuesday, Nokia emphasized its previous projections of 105 million to 110 million phones to be shipped in the fourth quarter for the whole industry. This jibes with Nokia's follow-up comments on Nov. 27 that attributed the reduced full-year shipment outlook to revised data from previous quarters.
Nokia fell more than 3% in Monday trading to $23.79, and has lost 6% of its value since Nov. 27.
The company plans to revamp its entire product line beginning with fourth-quarter introductions and continuing through 2002. Nokia announced in the third quarter it would have three GPRS phones on the market by the end of 2001, but some of those have
faced delays, hampering the rollout of the next-generation services in Europe, according to reports.
On Tuesday, Nokia reported that its mobile-phone division is enjoying "healthy" average selling prices in the fourth quarter, but that the ASP figure is down compared with last year's fourth quarter. Nokia expects the highest sequential growth from handset shipments to the Americas and Europe, based on seasonality in those geographies. Sluggish European sales have hamstrung Nokia's results in 2001.