After Climbing the Hill, Wireless Investors Find the View Is Terrible - TheStreet

Updated from 8:39 a.m. ET

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Wireless investors are heading back to their



After a down first quarter, investors sought an opportunity for a jog upward.


(NOK) - Get Report

great balance sheet and shapely order growth seemed to defy the deplorable market conditions.






were crashing to the bottom. What better time for a run? After a month of panting uphill, however, investors threw up their hands, picked up their fallen bags of


and climbed back into the reclining position as all the indicators turned against second-quarter upside.

The biggest news came Tuesday, when Nokia

said it expects the global mobile-phone market will show only "very modest growth" this year. The cell-phone maker also said the weaker market conditions will hurt its financial performance during the second quarter. It forecast pro forma earnings of 0.15 euro to 0.17 euro a share (13 cents to 14 cents a share) in the second quarter, down from the previous estimate of about 0.20 euro (17 cents). According to

Thomson Financial/First Call

, analysts expect the company to earn 18 cents a share in the second quarter. The company earned 19 cents in the year-ago period.

Nokia's announcement followed news Monday that re-emphasized that the equipment life is better lived on the sidelines right now. Communications IC makers






warned about poor second-quarter results ahead. On May 23, competitor



warned business was slow. Last week wireless chipmaker

Texas Instruments

(TXN) - Get Report

announced it would be idling two Dallas fabs for three weeks during this little economic timeout.

In a conference call following its warning, Anadigics revealed plans to lay off 10% of its staff, reduced its margin estimates for the second quarter that ends June 30 to 10% and concluded that the third quarter wouldn't get better revenue-wise from second-quarter estimates of $18.5 million, although margins would improve to 20%. Anadigics CFO Tom Shields blamed "low visibility" and business so slow that its fabs were operating with less than 20% utilization. Count Ericsson as a key Anadigics customer. Fields did point out that he expects wireless business to start to reverse its course in the third quarter.

Powerwave CEO Bruce Edwards issued a statement that referenced "lower demand for our 2G single-carrier products" and "ongoing softness in the network operator market" to explain new revenue estimates of $70 million to $80 million. Analysts were expecting $83.75 million for the second quarter ending July 1.

In the past several weeks, investors shrugged off their earlier excitement, and since mid-May Nokia has given back 20% of its value, closing Monday at $28.71. Even squashed Motorola managed to cough up 10%, with Ericsson falling 20%. On Friday,

Morgan Stanley Dean Witter

analyst Angela Dean kicked Ericsson with a downgrade to underperform at a limping $6 and said, in a crippling 44-page report, that Ericsson had lost its ability to compete. Debt monitors dropped their ratings on Motorola's credit in the past two weeks, making borrowing more costly for the turnaround candidate. Friday, Nokia reminded us that streamlining operations is important for it to stay lean, by laying off 300 workers at a German mobile-phone factory. And then came its profit warning Tuesday.

For those who've been running with headphones on, the second-quarter forecast was bad for all three. Optimists have been reminded in the past two weeks that, no, the market leaders weren't just being shrewd in setting expectations low.