Nokia is expected to announce weak first-quarter sales when it reports earnings tomorrow, and many industry watchers are looking to the company to gauge whether the handset market has bottomed out or if it will get worse.
Analysts expect the world's largest handset maker to report a drop in shipments of 20 percent, with revenues around $12.6 billion. The company had sales of $16.4 billion in the fourth quarter of 2008.
However, there may be glimmers of hope for Nokia. Some analysts expect the company to announce that it has cut down its inventory from the fourth quarter of 2008, setting the stage for a comeback in the second quarter. The company has recently taken measures to streamline its operations, cutting 1,700 jobs worldwide and temporarily suspending the use of outsourcing for its handset manufacturing.
Nokia, while still the global leader in handset market share, saw its net profit drop 69 percent in the fourth quarter. The company shipped 113.1 million units in the quarter, down 15 percent from the 133.5 million it shipped in the fourth quarter last year. And recent research from Gartner has shown that its smartphone market share also eroded slightly in 2008. Nokia's stock today hovered around $13 per share, well off its 52-week high of $33.
Interestingly, Nokia could also shed some light during its earnings call on reports that its joint venture with Siemens--Nokia Siemens Networks--is bidding for parts of Nortel Networks' CDMA carrier networks business. The move could be a significant overture to Verizon Wireless, the largest CDMA operator in the United States.
- see this MarketWatch article
- see this BusinessWeek article
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