Nokia issues bearish forecast for Q3

Nokia Corp posted in-line second quarter earnings but issued bearish forecasts for third quarter sales resulting in its stock plummeting, and impacted the tech sector across Europe.

Nokia said it sees third quarter mobile phones sales flat or slightly down from a year ago, while network sales are expected to fall a massive 15-20%.

The market took the forecasts badly, marking Nokia's stock down more than 10% following the earnings release. This impacted the shares of its leading rivals, notably Ericsson and Alcatel.

Leading US broker Lehman Brothers is understood to have placed all of its Nokia forecasts under review in the wake of the results - with the group's new third quarter guidance falling well below the broker's own expectations.

And dealers said that move is likely to be followed at other major brokerage houses, though many will wait until after this afternoon's Nokia conference call before revisiting their figures for the current year and beyond.

Nokia said its handsets global market share grew to 39% in the second quarter on gains in the US, up 1% from the first quarter.

Jorma Ollila, president and chief executive said in a statement: "Overall, however, our sales reflected general economic and dollar weakness."

He also said he sees Nokia's position improving in the second half of 2003 in the Chinese handsets market, where the company is due to launch 10 new products before year-end.