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Nokia Lowers Devices & Services Second Quarter 2010 Outlook and Updates the Full Year 2010 Outlook

June 16, 2010

ESPOO, Finland, June 16, 2010 /PRNewswire-FirstCall/ — Nokia (NYSE: NOK)
today commented on factors impacting its business and updated its second
quarter and full year 2010 outlook for Devices & Services. During the second
quarter 2010, multiple factors are negatively impacting Nokia’s business to a
greater extent than previously expected. These factors include: the
competitive environment, particularly at the high-end of the market, and
shifts in product mix towards somewhat lower gross margin products. In
addition, the recent depreciation of the Euro affects Nokia’s cost of goods
sold, operating expenses and global pricing tactics.

Updated outlook for Devices & Services for the second quarter 2010: -
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.

Updated outlook for Devices & Services and mobile device market for the
full year 2010: – Nokia continues to expect industry mobile device volumes to
be up approximately 10% in 2010, compared to 2009 (based on its revised
definition of the industry mobile device market applicable beginning in
2010). – Nokia continues to target its mobile device volume market share to
be flat in 2010, compared to 2009. – Nokia now expects its mobile device
value market share to be slightly lower in 2010, compared to 2009. This
update is primarily due to the competitive situation at the high-end of the
market and shifts in product mix. This is an update to our previous target to
increase our mobile device value market share slightly in 2010, compared to
2009. – Nokia continues to target non-IFRS operating expenses in Devices &
Services of approximately EUR 5.7 billion in 2010. – 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.

Nokia will provide its second quarter results and more details on its
2010 full year outlook when it reports its Q2 2010 results on July 22, 2010.

Nokia will be hosting a conference call at 13:30 UK time (8:30 EST). The
dial-in number for media (listen only – the question and answer session will
be limited to financial analysts and investors only) is +1-706-634-5012.
Conference ID: 82113811.

The dial-in number for financial analysts and investors is US:
+1-888-636-1561. Conference ID: 82113811. UK: +44-1452-560-299. Conference
ID: 82236648.

A replay of the call will be available soon after the call completion.
The replay number is US: +1-800-642-1687. Conference ID: 82113811. UK:
+44-1452-55-0000. Conference ID: 82236648.

About Nokia

At Nokia, we are committed to connecting people. We combine advanced
technology with personalized services that enable people to stay close to
what matters to them. Every day, more than 1.2 billion people connect to one
another with a Nokia device – from mobile phones to advanced smartphones and
high-performance mobile computers. Today, Nokia is integrating its devices
with innovative services through Ovi (http://www.ovi.com), including music,
maps, apps, email and more. Nokia’s NAVTEQ is a leader in comprehensive
digital mapping and navigation services, while Nokia Siemens Networks
provides equipment, services and solutions for communications networks
globally.

FORWARD-LOOKING STATEMENTS

It should be noted that certain statements herein which are not
historical facts are forward-looking statements, including, without
limitation, those regarding: A) the timing of the deliveries of our products
and services and their combinations; B) our ability to develop, implement and
commercialize new technologies, products and services and their combinations;
C) expectations regarding market developments and structural changes; D)
expectations and targets regarding our industry volumes, market share,
prices, net sales and margins of products and services and their
combinations; E) expectations and targets regarding our operational
priorities and results of operations; F) the outcome of pending and
threatened litigation; G) expectations regarding the successful completion of
acquisitions or restructurings on a timely basis and our ability to achieve
the financial and operational targets set in connection with any such
acquisition or restructuring; and H) statements preceded by “believe,”
“expect,” “anticipate,” “foresee,” “target,” “estimate,” “designed,” “plans,”
“will” or similar expressions. These statements are based on management’s
best assumptions and beliefs in light of the information currently available
to it. Because they involve risks and uncertainties, actual results may
differ materially from the results that we currently expect. Factors that
could cause these differences include, but are not limited to: 1) the
competitiveness and quality of our portfolio of products and services and
their combinations; 2) our ability to timely and successfully develop or
otherwise acquire the appropriate technologies and commercialize them as new
advanced products and services and their combinations, including our ability
to attract application developers and content providers to develop
applications and provide content for use in our devices; 3) our ability to
effectively, timely and profitably adapt our business and operations to the
requirements of the converged mobile device market and the services market;
4) the intensity of competition in the various markets where we do business
and our ability to maintain or improve our market position or respond
successfully to changes in the competitive environment; 5) the occurrence of
any actual or even alleged defects or other quality, safety or security
issues in our products and services and their combinations; 6) the
development of the mobile and fixed communications industry and general
economic conditions globally and regionally; 7) our ability to successfully
manage costs; 8) exchange rate fluctuations, including, in particular,
fluctuations between the euro, which is our reporting currency, and the US
dollar, the Japanese yen and the Chinese yuan, as well as certain other
currencies; 9) the success, financial condition and performance of our
suppliers, collaboration partners and customers; 10) our ability to source
sufficient amounts of fully functional components, sub-assemblies, software,
applications and content without interruption and at acceptable prices and
quality; 11) our success in collaboration arrangements with third parties
relating to the development of new technologies, products and services,
including applications and content; 12) our ability to manage efficiently our
manufacturing and logistics, as well as to ensure the quality, safety,
security and timely delivery of our products and services and their
combinations; 13) our ability to manage our inventory and timely adapt our
supply to meet changing demands for our products; 14) our ability to protect
the complex technologies, which we or others develop or that we license, from
claims that we have infringed third parties’ intellectual property rights, as
well as our unrestricted use on commercially acceptable terms of certain
technologies in our products and services and their combinations; 15) our
ability to protect numerous Nokia, NAVTEQ and Nokia Siemens Networks
patented, standardized or proprietary technologies from third-party
infringement or actions to invalidate the intellectual property rights of
these technologies; 16) the impact of changes in government policies, trade
policies, laws or regulations and economic or political turmoil in countries
where our assets are located and we do business; 17) any disruption to
information technology systems and networks that our operations rely on; 18)
our ability to retain, motivate, develop and recruit appropriately skilled
employees; 19) unfavorable outcome of litigations; 20) allegations of
possible health risks from electromagnetic fields generated by base stations
and mobile devices and lawsuits related to them, regardless of merit; 21) our
ability to achieve targeted costs reductions and increase profitability in
Nokia Siemens Networks and to effectively and timely execute related
restructuring measures; 22) developments under large, multi-year contracts or
in relation to major customers in the networks infrastructure and related
services business; 23) the management of our customer financing exposure,
particularly in the networks infrastructure and related services business;
24) whether ongoing or any additional governmental investigations into
alleged violations of law by some former employees of Siemens AG (“Siemens”)
may involve and affect the carrier-related assets and employees transferred
by Siemens to Nokia Siemens Networks; 25) any impairment of Nokia Siemens
Networks customer relationships resulting from ongoing or any additional
governmental investigations involving the Siemens carrier-related operations
transferred to Nokia Siemens Networks; as well as the risk factors specified
on pages 11-32 of Nokia’s annual report Form 20-F for the year ended December
31, 2009
under Item 3D. “Risk Factors.” Other unknown or unpredictable
factors or underlying assumptions subsequently proving to be incorrect could
cause actual results to differ materially from those in the forward-looking
statements. Nokia does not undertake any obligation to publicly update or
revise forward-looking statements, whether as a result of new information,
future events or otherwise, except to the extent legally required.

http://www.nokia.com

SOURCE Nokia Corporation


Source: newswire