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Nokia calls in an earnings warning

Melanie Austria Farmer, CNET News.com CNet

Published: 12 Jun 2001 14:41 BST

Mobile phone heavyweight Nokia on Tuesday warned that second-quarter earnings will fall below estimates and that it expects to revise its outlook for the remainder of the year.

Nokia now expects second-quarter earnings per share to be in the range of 13 cents to 14 cents per share. The company had previously expected to earn 17 cents.

Analysts surveyed by First Call had expected the Finnish company to earn 18 cents a share in the quarter.

Nokia said that the overall economic slowdown in the United States and in the wireless communications sector have spilled over to other regions, affecting mobile phone sales and growth. Unlike its rivals, Nokia until now had maintained its earlier predictions, including a bold one that mobile phone sales would reach the 500-million level for the year.

When Nokia president Jorma Olilla made the prediction in April, he acknowledged the difficulty in hitting that mark. "We are sticking our head out a lot on this," he said at the time.

Now, the company also expects the global mobile phone market to soften and show only modest growth this year compared with 2000, when about 405 million phones were sold.

Nokia said it is currently revisiting its outlook for the second half of the year. Updated estimates for the second half will be released on 19 July when Nokia is slated to report second-quarter earnings.

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