Investors dumped Nokia Corp.’s shares following the company’s lower-than-expected revenues and warnings of sluggish sales for the coming quarter. Indeed, uninspiring reports from Nokia, Motorola Inc., Lucent Technologies Inc. and others forced the high-tech market down, with the Nasdaq dropping about 35 points in morning trading.
For its part, Nokia’s stock was down almost 18 percent to about $14.70 per share following its earnings report. The company’s net sales were up 1 percent from the same quarter last year to about $7.8 billion, but the company’s operating profit was down 32 percent to $958 million.
But besides its mundane second quarter, investors really latched onto the company’s outlook for the third quarter. Nokia said it expects mobile-phone volumes to grow by 10 percent, which the company said represented faster-than-market growth, but it said sales will be flat or even slightly down. Nokia blamed the depressing outlook mainly on the depreciation of the U.S. dollar.
However, Nokia boasted of its increasing market share, which the company said clocked in at an impressive 39 percent. The company bragged of its gains in the U.S. mobile-phone market, as well as increasing CDMA sales. Credit Suisse First Boston said Nokia seems to be stealing market share from its two main mobile-phone rivals Motorola and Samsung Electronics Co. Ltd.
Nokia’s outlook for its networks division was much the same as previous years, with the company expecting “no sign of improvement.” Nokia said it expects a third-quarter, year-on-year sales decline of 15 to 20 percent in its infrastructure business.
In an interesting side note, Nokia said it will fully jump into the wireless enterprise business with the creation of its new Nokia Enterprise Solutions business division. The company said the division will bring together its mobile phones and funding efforts to offer businesses a range of mobile devices and platforms, as well as secure connectivity solutions. The announcement follows Nokia’s purchase of wireless enterprise company Eizel Technologies earlier this year.
Separately, Cingular Wireless announced it will sell the Nokia 3300 music phone, which includes an MP3 player.
