Nokia Oyj, the world's largest mobile-phone maker, said revenue may fall for a fourth straight quarter and profit may be little changed as Samsung Electronics Co. gains market share. The stock fell as much as 9.7 percent.
Second-quarter sales may be little changed or ``slightly below'' last year's revenue of 7.02 billion euros ($8.4 billion). Profit may be 13 cents to 15 cents a share, compared with 13 cents a year earlier, when costs from job cuts shaved 6 cents off profit, Nokia said in a Helsinki exchange statement.
``Nokia is getting hurt big time by Samsung right now,'' said Egbert Jan Nijmeijer at Robeco Groep in Rotterdam, which oversees $42 billion, including Samsung shares. ``They are between a rock and a hard place.''
Revenue at Espoo, Finland-based Nokia is sputtering as competitors such as Samsung, Siemens AG and LG Electronics Inc. gain market share. Nokia's revenue fell in 2002 and 2003 as Western markets became saturated, phone prices slipped and the dollar fell against the euro. Samsung is the world's No. 3 mobile- phone maker behind Nokia and Motorola Inc. by unit sales.
Nokia was expected to predict a 3.7 percent drop in sales for this quarter and a profit of 18 cents a share, according to the median forecast of seven analysts in a Bloomberg News survey.
Shares of Nokia fell as much as 1.31 euros to 12.2 euros, a 13-month low, and traded at 12.44 euros at 2.44 p.m. in Helsinki. Nokia's decline since last week means Samsung has overtaken the Finnish company as the world's largest technology company outside the U.S. Samsung's market value is now $76.4 billion, compared with about $68.4 billion for Nokia.
Product Range Gaps
Nokia last week said its first-quarter revenue slid 2 percent. Its handset sales volumes rose 19 percent, slower than the 29 percent growth for all mobile-phone makers, the company said today. Chief Executive Officer Jorma Ollila, 53, said last week Nokia had been too slow to fill gaps in its product range, such as adding a clamshell model that flips open.
``If you look at all the money they've spent on research and development, it's hard to forgive them for what's happening now,'' said Tom Bystedt at 3C Asset Management in Stockholm, which manages about $620 million and doesn't hold Nokia stock. ``Strong measures will be needed to sort this out.''
Samsung last week raised its sales forecast for 2004 to more than the 65 million units it had predicted in January. It cited growing demand for handsets with color screens and cameras, features that help make clamshell phones popular. Samsung today said first-quarter profit almost tripled to a record 3.1 trillion won ($2.7 billion) and will rise through June.
Market Share Woes
Nokia and Motorola both lost market share in the fourth quarter last year to Samsung, Siemens and LG. Nokia slipped to 34.7 percent of the market from 36.1 percent, while Motorola's share shrank to 14.2 percent from 17.1 percent, according to market researcher Gartner Inc.
Samsung's market share rose to 9.9 percent and Siemens's share increased to 9.5 percent in the fourth quarter. LG was the fifth-largest and fastest-growing handset maker, while Sony Ericsson Mobile Communications Ltd. ranked sixth.
Nokia today said it sold 44.7 million of the total 128 million mobile phones sold in the first quarter, resulting in a market share of 35 percent. Samsung today said its shipments grew 52 percent to 20.1 million in the first quarter.
``There were some changes in competitors' products and we weren't as swift,'' Ollila said in an interview with CNBC. The ``major'' effect of new Nokia phones will come ``toward the end of the year,'' Ollila told CNBC.
Camera Phones
Nokia has fallen out of step with consumers' demands just as mobile-phone sales have recovered with the new popularity of picture-taking and Internet capabilities. Global handset sales volumes will rise 12 percent to 580 million units this year, after gaining a fifth last year, Gartner forecasts.
Global handset volume growth will reach the ``high teens'' this year, Ollila said in the release. He in January forecast unit sales growth of ``somewhat'' more than 10 percent.
Only 6 percent of the phones Nokia sold last year were equipped with a camera, compared with 30 percent for Sony Ericsson and 18 percent for Samsung, according to Boston-based market researcher Strategy Analytics.
Before today, Nokia's stock had fallen 3.2 percent in the past year. Shares of Suwon, South Korea-based Samsung have more than doubled, as have shares of Schaumburg, Illinois-based Motorola. Shares of Munich-based Siemens had gained 43 percent.
First-Quarter Profit
In the first quarter, net income fell to 816 million euros, or 17 cents a share, from 977 million euros, or 20 cents, in the year-earlier quarter, when one-time gains added 4 cents to profit, Nokia said in the statement. The company announced first- quarter earnings per share and sales last week.
When all telecommunications companies suffered in 2001 and 2002, Nokia kept its margins at industry highs by farming out a fifth of production and using the platforms for older phones to develop new products.
Last week, Nokia said it would speed up its introduction of new phones in the last three quarters of the year, bringing the number to a record-tying 40 in 2004. Samsung has said it plans to introduce about 50 phones in its domestic market alone.
Nokia started selling its first clamshell model, the 7200, in Europe last month, years after some competitors. This quarter, it will start selling the 7610, its first camera phone with one- megapixel resolution, allowing for higher-quality pictures.
New Structure
To react to customer preferences faster, Ollila has reorganized the handset division into smaller, more focused units to target specific users based on their preference, be it phones with cameras, organizers or games. The new organization may have initially hurt sales, Ollila said last week.
Ollila is also expanding to products such as portable game devices as demand for regular mobile phones cools. Nokia said demand for its N-Gage game device was ``disappointing'' in the first quarter. The company unveiled an improved and cheaper version of the player this week.
Sales at the unit making regular mobile phones fell 15 percent to 4.3 billion euros in the first quarter. Sales at multimedia unit, which makes camera phones, rose 60 percent to 776 million euros. Sales at enterprise solutions division, which makes phones for businesses, almost doubled to 189 million euros.
Sales at the network unit, accounting for a fifth of revenue, are reviving as operators roll out new networks that can handle video calls. Nokia, which last year cut more than 2,000 jobs at the unit as demand slumped, said sales at the division grew 16 percent in the first quarter and forecast the market as a whole will be ``slightly up'' this year.
To boost earnings per share, Nokia said it may buy back shares worth 3 billion euros in the next 12 months after spending 642 million euros on buybacks last quarter. Its net cash position was 11.4 billion at the end of first quarter.
``Nokia is showing all the hallmarks of a mature company,'' Richard Windsor, an analyst at Nomura International Plc in London, said in a research note yesterday. ``Growth has been very low for the last few years while cash generation has been strong.''
Second-quarter sales may be little changed or ``slightly below'' last year's revenue of 7.02 billion euros ($8.4 billion). Profit may be 13 cents to 15 cents a share, compared with 13 cents a year earlier, when costs from job cuts shaved 6 cents off profit, Nokia said in a Helsinki exchange statement.
``Nokia is getting hurt big time by Samsung right now,'' said Egbert Jan Nijmeijer at Robeco Groep in Rotterdam, which oversees $42 billion, including Samsung shares. ``They are between a rock and a hard place.''
Revenue at Espoo, Finland-based Nokia is sputtering as competitors such as Samsung, Siemens AG and LG Electronics Inc. gain market share. Nokia's revenue fell in 2002 and 2003 as Western markets became saturated, phone prices slipped and the dollar fell against the euro. Samsung is the world's No. 3 mobile- phone maker behind Nokia and Motorola Inc. by unit sales.
Nokia was expected to predict a 3.7 percent drop in sales for this quarter and a profit of 18 cents a share, according to the median forecast of seven analysts in a Bloomberg News survey.
Shares of Nokia fell as much as 1.31 euros to 12.2 euros, a 13-month low, and traded at 12.44 euros at 2.44 p.m. in Helsinki. Nokia's decline since last week means Samsung has overtaken the Finnish company as the world's largest technology company outside the U.S. Samsung's market value is now $76.4 billion, compared with about $68.4 billion for Nokia.
Product Range Gaps
Nokia last week said its first-quarter revenue slid 2 percent. Its handset sales volumes rose 19 percent, slower than the 29 percent growth for all mobile-phone makers, the company said today. Chief Executive Officer Jorma Ollila, 53, said last week Nokia had been too slow to fill gaps in its product range, such as adding a clamshell model that flips open.
``If you look at all the money they've spent on research and development, it's hard to forgive them for what's happening now,'' said Tom Bystedt at 3C Asset Management in Stockholm, which manages about $620 million and doesn't hold Nokia stock. ``Strong measures will be needed to sort this out.''
Samsung last week raised its sales forecast for 2004 to more than the 65 million units it had predicted in January. It cited growing demand for handsets with color screens and cameras, features that help make clamshell phones popular. Samsung today said first-quarter profit almost tripled to a record 3.1 trillion won ($2.7 billion) and will rise through June.
Market Share Woes
Nokia and Motorola both lost market share in the fourth quarter last year to Samsung, Siemens and LG. Nokia slipped to 34.7 percent of the market from 36.1 percent, while Motorola's share shrank to 14.2 percent from 17.1 percent, according to market researcher Gartner Inc.
Samsung's market share rose to 9.9 percent and Siemens's share increased to 9.5 percent in the fourth quarter. LG was the fifth-largest and fastest-growing handset maker, while Sony Ericsson Mobile Communications Ltd. ranked sixth.
Nokia today said it sold 44.7 million of the total 128 million mobile phones sold in the first quarter, resulting in a market share of 35 percent. Samsung today said its shipments grew 52 percent to 20.1 million in the first quarter.
``There were some changes in competitors' products and we weren't as swift,'' Ollila said in an interview with CNBC. The ``major'' effect of new Nokia phones will come ``toward the end of the year,'' Ollila told CNBC.
Camera Phones
Nokia has fallen out of step with consumers' demands just as mobile-phone sales have recovered with the new popularity of picture-taking and Internet capabilities. Global handset sales volumes will rise 12 percent to 580 million units this year, after gaining a fifth last year, Gartner forecasts.
Global handset volume growth will reach the ``high teens'' this year, Ollila said in the release. He in January forecast unit sales growth of ``somewhat'' more than 10 percent.
Only 6 percent of the phones Nokia sold last year were equipped with a camera, compared with 30 percent for Sony Ericsson and 18 percent for Samsung, according to Boston-based market researcher Strategy Analytics.
Before today, Nokia's stock had fallen 3.2 percent in the past year. Shares of Suwon, South Korea-based Samsung have more than doubled, as have shares of Schaumburg, Illinois-based Motorola. Shares of Munich-based Siemens had gained 43 percent.
First-Quarter Profit
In the first quarter, net income fell to 816 million euros, or 17 cents a share, from 977 million euros, or 20 cents, in the year-earlier quarter, when one-time gains added 4 cents to profit, Nokia said in the statement. The company announced first- quarter earnings per share and sales last week.
When all telecommunications companies suffered in 2001 and 2002, Nokia kept its margins at industry highs by farming out a fifth of production and using the platforms for older phones to develop new products.
Last week, Nokia said it would speed up its introduction of new phones in the last three quarters of the year, bringing the number to a record-tying 40 in 2004. Samsung has said it plans to introduce about 50 phones in its domestic market alone.
Nokia started selling its first clamshell model, the 7200, in Europe last month, years after some competitors. This quarter, it will start selling the 7610, its first camera phone with one- megapixel resolution, allowing for higher-quality pictures.
New Structure
To react to customer preferences faster, Ollila has reorganized the handset division into smaller, more focused units to target specific users based on their preference, be it phones with cameras, organizers or games. The new organization may have initially hurt sales, Ollila said last week.
Ollila is also expanding to products such as portable game devices as demand for regular mobile phones cools. Nokia said demand for its N-Gage game device was ``disappointing'' in the first quarter. The company unveiled an improved and cheaper version of the player this week.
Sales at the unit making regular mobile phones fell 15 percent to 4.3 billion euros in the first quarter. Sales at multimedia unit, which makes camera phones, rose 60 percent to 776 million euros. Sales at enterprise solutions division, which makes phones for businesses, almost doubled to 189 million euros.
Sales at the network unit, accounting for a fifth of revenue, are reviving as operators roll out new networks that can handle video calls. Nokia, which last year cut more than 2,000 jobs at the unit as demand slumped, said sales at the division grew 16 percent in the first quarter and forecast the market as a whole will be ``slightly up'' this year.
To boost earnings per share, Nokia said it may buy back shares worth 3 billion euros in the next 12 months after spending 642 million euros on buybacks last quarter. Its net cash position was 11.4 billion at the end of first quarter.
``Nokia is showing all the hallmarks of a mature company,'' Richard Windsor, an analyst at Nomura International Plc in London, said in a research note yesterday. ``Growth has been very low for the last few years while cash generation has been strong.''
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