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NEWS
Nokia on track to reach third quarter profit
guidance on slightly lower sales
(September 11, 2001)
Nokia today provided a mid-quarter update on the company's business outlook for
the third quarter, 2001. The company expects to reach its third quarter profit
estimate made on July 19.
Nokia continues to maintain market leadership without compromising profitability
even in today's turbulent market conditions. Based on developments during the
first two months of the quarter, third quarter pro forma operating margin for
the Nokia Group is expected to be in the mid-teens, and pro forma EPS (diluted)
for the third quarter to be within the earlier communicated range of EUR
0.14-0.16. However, Nokia expects revenue for the third quarter to be about 5%
lower than the third quarter last year, compared with earlier expectations of 0
to 5% year-on-year growth.
The company continues to build on leading market positions in its two main
businesses, mobile network infrastructure and mobile phones, which have been
subject to different dynamics during recent months.
Nokia Mobile Phones revenues are expected to be approximately at the same level
as in the third quarter of 2000. Driven by leading products, successful
execution and strong brand, Nokia Mobile Phones has been able to maintain
healthy margins even in the seasonally weaker third quarter. Demand is showing
signs of picking up in the US, and the Asian market continues to show a solid
performance. During the coming months, Nokia plans to introduce several new
phone models.
On the infrastructure side, the ongoing technology transition from mobile voice
to mobile data together with the economic instability have increased
uncertainty, as some operators are reassessing the timing of their GSM network
investments. This is expected to result in lower year-on-year sales and
profitability for Nokia Networks in the third quarter.
Nokia will report its third quarter earnings on October 19, 2001, and plans to
make a mid-quarter update for the fourth quarter on December 11.
A conference call has been scheduled for today at 16:00 Helsinki time (9 a.m. in
EST). To access the conference call please visit www.nokia.com/investor.
It should be noted that certain statements herein which are not historical
facts, including, without limitation those regarding 1) the timing of product
deliveries; 2) the Company´s ability to develop and implement new products and
technologies; 3) expectations regarding market growth and developments; 4)
expectations for growth and profitability; and 5) statements preceded by
"believes", "expects", "anticipates",
"foresees", or similar expressions, are forward-looking statements.
Because such statements involve risks and uncertainties, actual results may
differ materially from the results currently expected by the Company. Factors
that could cause such differences include, but are not limited to 1) industry
conditions, such as the strength of product demand, the intensity of
competition, pricing pressures, the acceptability of new product introductions
such as Internet-ready phones, the introduction of new products by competitors,
the impact of changes in technology, including the Company's success in the
emerging 3G market, the introduction and marketing of new products and services
by operators, the ability of the Company to source components from third parties
without interruption and at reasonable prices, demand for vendor financing and
the Company's ability and willingness to provide such financing and to mitigate
the related exposure, and the success and financial condition of the Company´s
strategic partners and customers; 2) operating factors, such as continued
success of manufacturing activities and the achievement of manufacturing
efficiencies therein, continued success of product development and inventory
risks due to shifts in market demand; 3) general economic conditions, such as
the rate of economic growth in the Company's principal geographic markets and in
the wireless telecommunications industry as a whole, and fluctuations in
exchange rates, including in particular the impact of the exchange rate between
the euro and the US dollar; as well as 4) the risk factors specified on pages 10
to 16 of the Company's Form 20-F for the year ended December 31, 2000.