Nokia Q2 results at high end

Mobile phone maker Nokia posted second-quarter profits at the high end of estimates yesterday, but said the third quarter would be worse and the last quarter difficult to call due to the lack of visibility in the market.

"Current economic and industry uncertainty limit our visibility for the remainder of 2001 . . . The lack of visibility does not allow us to give specific growth guidance for the fourth quarter," Nokia said in a statement.

Nokia, currently the only profitable company among the top handset makers, said second-quarter pre-tax profit fell 20 per cent year-on-year to #1.17 billion compared with #1.09 billion in an analyst poll.

The Finnish company cast a cloud over hopes for a possible rebound in the handsets market for the rest of the year despite earlier positive comments from US rival Motorola. However, it said it expected the market to pick up next year.

Nokia, increasingly under pressure from a slowing global economy, weaker consumer demand and lower spending by telecoms operators, said third-quarter earnings per share would be 14-16 cents compared with 17 cents in the second quarter. It could only say that the fourth quarter would be better than that.

Nokia's earnings per share for the April-June period came in at 17 cents - in line with the company's shock profit warning last month.

"The news was surprisingly predictable and close to estimates. They gave very little guidance to supplement what was already said with their profit warning," Nordea Securities analyst Mika Paloranta said.

"The worst fears were perhaps soothed, but the trend is worrying... Q3 will be even weaker, it is difficult to find factors that should raise the share by very much," he added.

Nokia's second-quarter net revenues - where more than 70 per cent comes from mobile phone sales - rose 5 per cent to #7.35 billion, worse than analysts' expectations.

Nokia said it was sticking to a goal of reaching a 40 per cent global handset market share from current levels of around 35 percent, but now said this was for the long term and not in the next few quarters.

It also said it would focus on profitability because of market conditions and increased pressure from rivals.