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Nokia Sees Q2 Sales Growth at 10%, Down From Earlier 20% Estimate

6/12/2001 12:51:00 PM Eastern

Helsinki, Finland - Sounding the warning bell, mobile phone maker Nokia said it expects weaker market conditions to impact its financial performance during the second quarter.

Nokia, the industry's largest producer of mobile phones, estimates year-on-year sales growth for the second quarter in 2001 will be somewhat below 10 percent, compared with the company's earlier estimate of 20 percent.

The company forecast only modest growth for the global handset market for the full year, compared to 2000, when about 405 million handsets were sold. This slowdown is due to general market deterioration - driven by economic uncertainty, the ongoing technology transition and less aggressive marketing by operators.

While market ramifications will lead to slower-than-anticipated growth in Nokia's sales, the company believes that its mobile phone business will continue to grow significantly faster than the overall market during 2001.

Also, it expects its network business will achieve an annual growth rate at least on par with overall market growth.

Due to this slowdown, Nokia expects diluted pro forma earnings per share to be 12.7 cents to 14.4 cents in the second quarter, compared with the previous estimate of 16.9 cents. The company's diluted pro forma earnings in the same three months last year was 17.8 cents.