Nokia gets City thumbs-up

Investors see good times ahead after Finnish phone maker announces that its earnings might be better than expected
Written by Graeme Wearden, Contributor

City analysts have reacted warmly to Nokia's announcement on Tuesday that it might exceed its projected earnings in the fourth quarter of 2001.

The unexpectedly upbeat forecast led to a rise in share prices across Europe, as it was interpreted as good news -- both for Nokia individually and the mobile industry in general. Several investment banks have now raised their predictions for Nokia's earnings, and are tipping the company to perform well in the months ahead.

Nokia told investors on Tuesday that its earnings per share in the fourth quarter of Q4 2001 would meet or exceed its earlier prediction of between 0.18 and 0.2 euros (between 0.111 pence and 0.124 pence). Market consensus was that Nokia would predict that earnings would be at the low end of that range.

The Finnish company attributed the upgraded guidance to an increase in its market share, and positive developments in the average retail price of its handsets. Nokia also confirmed that its was still expecting to see total fourth-quarter sales up 20 percent compared with Q3, with sales of mobile handsets up some 25 percent.

In response, analysts have announced they are upbeat about the firm's prospects. Credit Suisse First Boston (CSFB) said on Wednesday morning that Nokia was still its top sector pick, as it offered better value than most of its competitors. CSFB forecasts that Nokia's Q4 2001 earnings will be 0.20 euros per share, up from its earlier estimate of 0.18 euros.

Lehman Brothers agrees with CSFB, describing Nokia on Wednesday morning as its "preferred play" in the mobile sector.

Investment bank Goldman announced that it is maintaining its "market outperform" rating on Nokia. It has raised its estimate of Nokia's earnings per share in 2002 to 0.81 euros (0.5 pence), from an earlier prediction of 0.78 euros (0.485 pence).

Nokia predicted that global handset sales for 2001 will reach 380 million, down on its October estimate of 390 million. It insisted that it expected to increase its market share in the last-quarter of this year -- which surprised those analysts who had been predicting it would be forced to issue a sales warning.

See the Mobile Technology News Section for full coverage.

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