Nokia Corp. has shown it is not immune to the multiple problems of SARS, the weak dollar and a soft market and projected its handset sales for the second quarter will fall either below or at the low end of expectations. The upside, though, is that the much-besieged infrastructure market witnessed a rise in fortune for the Finnish company.
“In mobile phones, second-quarter sales growth is expected to be positive but at the low end or below the guided range of 4 percent to 12 percent year on year, with sales growth slightly less for the Nokia Group,” said the company, although the sales surpassed the first quarter.
“Sales reflect continued economic weakness in Europe and the U.S., and the impact of SARS on consumer behavior, especially in China,” said Nokia.
The company said it will break even in its infrastructure division, excluding the projected restructuring charge of between $408.8 million and $467.2 million. But this does not detract from the essential weakness of the sector.
“Second-quarter sales at Nokia Networks are estimated to decrease by 0 to 5 percent year on year, as operators in all major regions continue to decrease their investments,” said the vendor.
Analysts have said that Nokia will be hurt from the weakness of the dollar, especially in the Chinese market, because all its contracts are based on euros.
Nokia’s infrastructure news helped the stock fortunes of competitors Alcatel Corp. and L.M. Ericsson as their share prices jumped early in the day. Nokia is the world’s leader in handset sales, while Ericsson still takes the lead in the gear market.
