PREVIEW-Nokia set to report weak Q3; focus on outlook, CEO

* Q3 report due Thursday at 1000 GMT

* Q3 underlying EPS seen dropping 41 pct y/y -poll

* Net profit to miss consensus by 9.3 pct -SmartEstimates

* Focus on outlook, smartphone portfolio

By Tarmo Virki, European Technology Correspondent

HELSINKI, Oct 20 (BestGrowthStock) – Nokia’s (NOK1V.HE: ) new boss,
Stephen Elop, is set to unveil a grim set of numbers on Thursday
when he presents his first quarterly earnings as a chief
executive of the world’s largest cellphone vendor.

Third-quarter underlying earnings per share are expected to
drop 41 percent from a year ago to 0.10 euros per share as the
Finnish firm lacked attractive, new smartphone models, to help
it to cash in on the smartphone boom. [ID:nLDE69C0ZS]

On Sept 21, Elop took over at the helm of Nokia from
Olli-Pekka Kallasvuo, who saw a halving of Nokia’s market value
during his four years in charge — mostly due to problems in the
fatter-margin smartphone market.

Nokia’s N8 model, its first serious rival to Apple (AAPL.O: )
— which sold a forecast-beating 14.1 million iPhones in the
quarter — only started shipping on the last day of September
and sales have not yet started in many markets.

Canada’s Research In Motion (RIM.TO: )(RIMM.O: ), which makes
the Blackberry, also sold more more smartphones than had been
expected in its fiscal quarter to the end of August.

“It’s possible that the volume upside which both RIM and
Apple delivered was partly derived from the headway they made in
Europe and Asia against Nokia,” said Tero Kuittinen, an analyst
at MKM Partners.

To battle for market share, Nokia cut smartphone prices in
the quarter. In its key British market, it cut the price for its
E5 model 15 percent over the quarter and slashed a further 7
percent off from the price of the aging Nokia 5800 model,
pricing data from CCS Insight showed.

EYES ON OUTLOOK

Analysts said they will focus on the first outlook comments
from the new chief executive, who is expected to turn around
Nokia’s fortunes, especially in the smartphone market. Last
week, Elop took the position of head of the business unit
combining services and smartphones.

Among the smaller-volume handset makers, Sony Ericsson
(6758.T

“Based on our research, we believe European handset sales
may have been a bit softer than expected, particularly in
September,” said MKM’s Kuittinen.

PC vendor Lenovo (0992.HK: ) told Reuters it saw a slowdown in
European consumers spending towards the end of the quarter.
[IDnLDE69I2GS]

Sony Ericsson said it also had component shortages in the
quarter, with lack of LCD screens and printed circuit boards
hitting its deliveries. Analysts said the impact on Nokia should
be much smaller as the Finnish firm benefits from 10 times
larger volumes in the procurement of parts.

GRIM TO GRIMMER

The actual numbers Nokia CEO Elop reports could be even
grimmer than has been predicted.

According to StarMine SmartEstimates, which give more weight
to timelier forecasts by the historically most accurate
analysts, Nokia’s net profit is expected to miss the consensus
forecast by 9.3 percent.

Bearish bets on Nokia rose sharply in the second half of
September when Elop took over as chief executive.
[ID:nN11130027]

Short interest in Nokia stock has increased a bit further to
2.3 percent during October from 1.8 percent at the end of
September, research firm Data Explorers said.

On average, Nokia shares have moved 9.62 percent in either
direction on earnings days over the last 10 quarters.

The stock has gained on average 7.4 percent on four positive
earnings days and dropped on average 11.1 percent on 6
weaker-than-expected reports.
(Reporting by Tarmo Virki; Editing by Karen Foster)

PREVIEW-Nokia set to report weak Q3; focus on outlook, CEO