14 DAY TRIAL // Finnish mobile phone maker Nokia has just issued a press-release announcing the lowering of its forecast for the second quarter of the ongoing year. According to the company, a series of factors negatively impacted its business in the quarter, including a competitive environment, which was felt mainly at the high-end of the market, or a move towards lower gross margin products. Moreover, the depreciation of Euro is another factor that impacted the company.
Here's what the updated Nokia forecast for the second quarter of 2010 looks like: - Nokia now expects Devices & Services net sales to be at the lower end of, or slightly below, its previously expected range of EUR 6.7 billion to EUR 7.2 billion for the second quarter 2010. This update is primarily due to lower than previously expected average selling prices and mobile device volumes. - Nokia now expects Devices & Services non-IFRS operating margin to be at the lower end of, or slightly below, its previously expected range of 9% to 12% for the second quarter 2010. This update is primarily due to a lower than previously expected gross margin.
At the same time, the mobile phone maker updated the outlook for the entire year 2010, saying that the industry mobile device volumes should grow by around 10 percent during the year when compared to 2009. At the same time, the company is aiming at enjoying a market share on the mobile phone market that would be flat when compared to the last year. However, the company says that it expects for its market share to drop slightly on a yearly basis, due to a tight competition at the high-end of the market and due to its shift in product mix.
Initially, the handset vendor said that it targeted a EUR 5.7 billion non-IFRS operating expenses in Devices & Services in 2010, but updates the forecast as follows: “Nokia now expects Devices & Services non-IFRS operating margin to be at the lower end of, or below, its previously targeted range of 11% to 13% for the full year 2010. This update is primarily due to the currently estimated gross margin, which is lower than previously estimated. Nokia expects Devices & Services non-IFRS operating margin during the fourth quarter 2010 to be higher than the currently expected full year Devices & Services non-IFRS operating margin.”
The Finnish phone maker is set to announce its second quarter results on July 2010. More info on its full-year 2010 outlook would be unveiled at that time.