Nokia expects earnings to rise 16% in Q2

Nokia expects to report a 16% earnings rise due to strong demand in emerging markets, yet its comments on the impact of slowing growth is likely to set the tone for its shares, a Reuters report said.

Nokia, the world's largest phone maker is benefiting from its dominant position in emerging markets and in cheap models, a poll of 31 analysts showed, the report also said.

'The economic uncertainties have definitely affected sales of pricier phones. Quite a moderate quarter has already been priced into the share,' Pohjola Bank analyst Hannu Rauhala, was quoted by the Reuters report as saying.

'The most interesting part is the outlook. Visibility is weak.'

Shares in Nokia have dropped more than 40% so far this year over investor fears that the global economic slowdown has started to crimp the handset industry, the Reuters report further said.

The world's fifth largest phone maker Sony Ericsson warned on June 27 it would make no profit in the April-June quarter due to weaker demand for its more expensive phones, and said the market was challenging.

Yet analysts say Sony Ericsson's problems could be more related to its internal issues than market demand, as smartphone maker High Tech Computer this week reported 21% year-on-year sales growth for June.

The poll, conducted by Inquiry Financial Intelligence, showed consumers in emerging markets buying their first phone or renewing their old models would still boost global cellphone sales growth to 14% in the April-June quarter from the year ago to 299 million phones.