HELSINKI, Finland-Mobile handset leader Nokia Corp. stunned investors with news that its first-quarter revenues will clock in below expectations due to poor mobile-phone sales. The company’s stock dropped almost 20 percent following the news to about $17.33 per share.
“The overall Nokia sales were negatively impacted because we were not able to fully exploit the usual seasonal market pickup in March, and the Mobile Phones product mix was weighted towards the low end. Although we are already starting to see the long-term benefits of the new organization, in the short term its implementation slightly slowed down our reactions and operational effectiveness,” said Jorma Ollila, the company’s chairman and chief executive officer.
Nokia’s announcement comes as other mobile-phone makers are predicting gangbuster quarters, and analyst firms are expecting the biggest year ever for the mobile-phone business. Nokia said the global mobile-phone industry grew more than 25 percent in the first quarter, but Nokia sales grew by only 19 percent. Nokia said its net sales for the first quarter will be around $7.9 billion, a 2-percent decline compared with the same quarter a year ago. Nokia said it earnings per share will come in at the lower end of its predictions.
Nokia said its mobile-phone and multimedia business groups will come in below expectations, although its networks and enterprise businesses will come in above expectations. Nokia said mobile-phone sales were lower in Europe and Asia due to a product mix with too many low-end phones and not enough mid-range phones.
Interestingly, wireless phone distributor CellStar Corp. also said its first-quarter earnings will be below expectations. The company said its U.S. profits are down due to lower-than-expected sales during the holiday season, which resulted in overstocked inventories for the first quarter. The company said its earnings per share will be between 10 and 12 cents, rather than the expected 20 cents.
In other phone news, chip maker RF Micro Devices Inc. said it is increasing sales of its RF3146 third-generation PowerStar power amplifier to Samsung Electronics Co. Ltd. RF Micro Devices said Samsung will use the chip in a variety of its GPRS devices.
