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Nokia may beat forecast
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December 11, 2001: 11:43 a.m. ET
Biggest mobile phone maker's shares rise on upbeat 4Q sales, profit outlook.
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LONDON (CNN) - Shares of Nokia rose more than 7 percent in New York early Tuesday, after the world's biggest mobile phone maker said it may beat its fourth-quarter earnings target as it sells more Web-enabled phones.
"The mobile phone market has developed according to company expectations, with fourth quarter volumes expected to reach 105 million to 110 million units," Nokia said in its mid-quarter update.
The Finnish company, which controls one third of the world's mobile phone market, said it expects its biggest growth to come in Europe and the Americas.
Nokia reaffirmed earlier projections that sales will grow by 20 percent in the final quarter of this year, compared with  7.1 billion in the third-quarter but would be lower than the 9.28 billion posted in the fourth quarter of last year.
It said earnings per share would be at the upper end or above estimates of between 0.18 and 0.20 ($0.16 and $0.18). In the same period a year ago, the company posted earnings per share of 0.25 when demand for handsets reached a peak.
The company is scheduled to release its fourth-quarter results on January 24.
Nokia's (NOK: up $1.77 to $25.56, Research, Estimates) American Depository Receipts were sharply higher in New York Stock Exchange trade Tuesday, rebounding from Monday's losses. The company's stock price has nearly doubled since Sept. 11 on signs of resilience in a tough market.
Shares of Nokia rivals Motorola (MOT: up $0.21 to $16.86, Research, Estimates), the No. 2 mobile-phone maker, and Ericsson (ERICY: up $0.23 to $6.05, Research, Estimates), which ranks third, were also on the rise.
Analysts said investors will be relieved that Nokia did not back away from its earlier projections.
"This is just what we should expect from a company of their standing and their understanding of the market," Susan Anthony, an analyst at Credit Lyonnais Securities, told CNN.
However, she said Nokia should not rely too heavily on growth through replacement sales. "The year 2002 will be tougher than Nokia seems to think."
Per Lindberg, an analyst at Dresdner Kleinwort Wasserstein, told CNN the upbeat outlook was "positive for Nokia and for the sector," and he expected other mobile phone operators to see similar growth in the fourth quarter, and possibly into 2002.
Mobile-phone makers have been hit hard by an economic slowdown and recession in many economies, such as Japan, Germany and the U.S. At the same time many telecom operators have canceled orders for new infrastructure, choosing to control costs and cut debts.
Meanwhile, consumers have delayed purchases of new phones while they await more attractive services that give quick access to the Internet.
In response to the sector downturn, Nokia has cut 4,700 jobs from its 60,000-strong workforce. 
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