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Color screen phones boost Nokia
HELSINKI, Finland (CNN) -- Finland's Nokia said on Thursday first-quarter net income rose as the world's biggest mobile phone maker cut costs and benefited from the sale of color screen phones. Net income rose 13 percent to 977 million euros ($1.1 billion), or 20 cents a diluted share in the three months to March 31. But sales slid 3 percent to 6.77 billion euros as Nokia continued to experience "difficult operating conditions" at its wireless infrastructure business. "With this strong performance from mobile phones, we succeeded in substantially reducing the impact of difficult operating conditions in our network infrastructure business,'' Chief Executive Jorma Ollila said in a statement. Nokia -- like rivals Ericsson of Sweden and Siemens of Germany -- has struggled over the past two years with falling demand for wireless equipment as cash-strapped telecom operators rein in spending on upgrading networks after years of runaway growth. The company, which has 40 percent of the global market for handsets, has announced plans to cut 2,350 jobs and reduce spending to counter a decline in revenue and sluggish growth worldwide. Nokia warned its second quarter earnings would be hurt by its ailing network business. The cost of reorganization and redundancies is expected to be in the range of 350 million euros to 400 million euros during the second quarter, Nokia said. Motorola (MOT), the world's second largest mobile phone maker, said on Tuesday second-quarter earnings would be weaker and it would cut more jobs. The U.S. giant forecast global industry-wide handset shipments of 430 million in 2003, the low end of its previous range. Nokia tweaked its outlook for the sector, saying it now expected about 10 percent growth in 2003 compared to its previous forecast of 10 percent or more. It predicts second-quarter sales to rise slightly less than the 4 to 12 percent expected at its main mobile phones unit, with pro forma diluted earnings per share seen between 0.13-0.16 euros versus 0.19 euros a year ago. "The guidance for the second quarter, excluding extra charges, look really good thanks to the phone operations, which I think is what supports the share,'' Hakan Wranne at brokerage Fischer Partners, told Reuters. Nokia, which previously forecast its networks market to fall by up to 10 percent in 2003, now said this market would fall by 15 percent or more. Nokia's stock rose 4.2 percent to 14.36 euros after the results.
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