Nokia's Shares Fall Despite Growth

Nokia, tumbled Tuesday after the company's report of a 64 percent increase in its mobile phone sales last year fell short of market expectations. <br><br>Nokia said it sold 128 million mobile phones

Tuesday, January 9th 2001, 12:00 am

By: News On 6

Nokia, tumbled Tuesday after the company's report of a 64 percent increase in its mobile phone sales last year fell short of market expectations.

Nokia said it sold 128 million mobile phones last year, and estimated that amounted to more than a 30 percent share of the worldwide market that it said grew about 45 percent to 405 million phones in 2000.

But analysts had expected Nokia to sell about 140 million phones and its shares sank more than 17 percent on the Helsinki Stock Exchange at one point before rallying to close at 41 euros ($38.95), down 8.7 percent.

Jussi Hyoty, chief analyst at FIM banking group in Helsinki, was surprised by investor reaction.

``Such a great drop in the share price came as a bit of a surprise because it seems that Nokia's mobile operations have grown mostly in line with expectations,'' Hyoty said. ``The problem of highly valued companies like Nokia is that when there's even a bit of information that could be interpreted negatively, then the market will react strongly.''

The research firm Dataquest Inc. said last week that Nokia had increased its share of mobile phone sales during the third quarter to 30 percent from 27.5 percent during the same period in 1999.

Schaumburg, Ill.-based Motorola Corp.'s share of mobile phone sales dropped to 13.3 percent, from 15.6 percent a year earlier, while Sweden's Ericsson saw a fall to 9.7 percent in the third quarter, from 10.3 percent in 1999, according to the Dataquest figures.

Also Tuesday, Nokia estimated that global cell phone subscribers increased by 12 percent last year to 700 million. It has predicted 1 billion cellular phone users by 2002.

Nokia, which has supplied digital mobile phone technology to 96 operators in 44 countries, earned $2.5 billion in 1999. Its 2000 earnings report will be released on Jan. 30.