Nokia Lowers Sales-Growth Projections

ByJohn McClenahen Even Nokia Corp., the clear leader in the highly competitive global mobile phone business, probably won't see its sales grow as fast in the current calendar quarter as the company originally forecast. The Espoo, Finland-based firm now estimates 25% to 30% first-quarter 2001 sales growth, five percentage points less than earlier projections. "This reflects somewhat slower-than-anticipated market growth during the first quarter and the company's strategy of aggressively gaining market share, especially in mobile phones," says the company. Profit margins for its mobile phone business are expected to reach 20% "at the latest" in this year's final quarter, while profitability for its network products is expected to be "in the high teens" after the first quarter. In the meantime, Nokia has posted impressive full-year 2000 results. Sales grew 54% from 1999's $17.55 billion (19.77 billion euros) to US$27 billion (30.4 billion euros). Operating profit, one of the better measures of a company's year-to-year performance, increased 48% in 2000, and net profit was up 53%. "We entered the year in a leadership role and again proved that we could convert that leadership into faster-than-market growth," asserts Jorma Ollila, Nokia's chairman and CEO. One cautionary note: Nokia's operating margin fell slightly in 2000 to 19% from 19.8% in 1999.