Nokia lifted global financial markets yesterday, despite a cut in second-quarter sales forecasts, as investors rewarded the company for sticking to its earnings forecast.
The world's leading maker of mobile phones warned that its second-quarter sales would be lower than last year but predicted its phones would sell for higher average prices later this year.
The Finnish group's shares had a roller-coaster ride yesterday, first plunging 9 per cent, and then rallying to close 6.6 per cent higher at €14.31 with investors reassured about the company's resilience in weak markets. Its comments helped lift technology stocks after last week's profit warning by Intel.
Nokia has seen its share price more than halve this year amid fears about saturated handset markets, weak sales of replacement phones, and weak demand for systems from cash-strapped telecoms operators. There have also been fears that Nokia's position is being threatened by gains in market share by rivals such as Motorola, Samsung and Siemens.
But Nokia insisted yesterday that it was still gaining ground, predicting that its second-quarter market share would rise from 37 per cent in the first three months to 38 per cent.
Mr Olli-Pekka Kallasvuo, Nokia chief financial officer, cheered investors when he forecast that the company's average selling prices would rise later in the year as the group introduced a number of new models, including its 7650 camera phone.
"Nokia has had good volumes at the low end of the market. It has faced tough competition at the high end but will probably be stronger in that segment in the second half," said Mr Mark Davies Jones, analyst at Schroder Salomon Smith Barney in London.
Nokia warned that second-quarter sales were likely to fall by 2 to 6 per cent to between €6.9 billion and €7.2 billion, reversing its April forecast of 2 to 7 per cent year-on-year growth.
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