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Nokia Stock Rockets

Nokia Corp. (NYSE: NOK) upgraded its sales and profit guidance for the fourth quarter of 2003 today, noting a slight upturn in capital expenditure of wireless equipment (see Nokia Exceeds Q4 Guidance).

The mildly optimistic announcement resulted in Nokia's share price rising steeply in Europe this morning. It was up 14.55 percent to €16.21 ($20.80) per share by press time.

Nokia's announcement follows comments made last October that carriers are at last beginning to ramp up investment in 3G W-CDMA (Wideband-Code Division Multiple Access) radio access networks (see Nokia Sees Network Boost).

Nokia claims that its fourth quarter network sales results -- due for release on January 22 -- are "significantly higher than estimated and reached approximately €1.7 ($2.16) billion," up from previous guidance of €1.4 ($1.78) billion (see Nokia's Mixed Blessings).

Chairman and CEO Jorma Ollila attributes the increase to "stronger than expected year-end operator investments and product mix."

As a result, Nokia's network division expects a pro forma operating margin of "approximately 12 percent," against a disappointing previous forecast of breakeven. Overall pro-forma earnings per share (diluted) will be €0.28 ($0.36) to €0.29 ($0.37), versus a guidance of €0.21 ($0.27) to €0.23 ($0.29).

Analysts have been quick to note the impact of recent upbeat activity in the infrastructure sector (see Christmas Capex Cheer?). "It indicates that operators are starting to think about investing for the future," claims Nomura Holdings Inc.'s Dr. Richard Windsor. "This is in stark contrast to the pattern of the last two years, where spending has been focused on squeezing the most traffic from the existing assets and projects to meet immediate demand."

— Justin Springham, Senior Editor, Europe, Unstrung

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