Both technology and old-economy sectors contributed yesterday to European market falls. The latest blue-chip technology company to issue a profits warning was Siemens, the German engineering and electronics conglomerate.
The company revised its earnings forecasts, saying it would not be able to meet its targets if its results included Infineon, the semiconductor unit. In December Siemens forecast double-digit growth in sales for the year to the end of September, including Infineon. Yesterday Siemens shares were down 2.3 per cent in late trading at #117.20, while Infineon rose 1.2 per cent to #37.21.
Mr Heinrich von Pierer, chief executive of Siemens, added that global sales of mobile phones could fall below 450 million this year, compared with Nokia's current estimate of 500 million-550 million. But shares in the Finnish mobile maker stayed in the black all day as hopes rose that no profit warning would be forthcoming, unlike its rival Ericsson the day before. Nokia's shares closed at #24.51, a rise of 4.7 per cent. They were #65 at their peak last June.
Deutsche Bank issued an earnings downgrade on Nokia, but added: "We believe the market is already assuming a profit warning from Nokia. Should this not occur, the stock could become one of the few sources of stability in a sector where earnings visibility is deteriorating almost daily."
Telecom equipment rival Ericsson, which fell 21 per cent on Monday after its profit warning, fell another 10 per cent in morning trade yesterday, but rallied to close 3.9 per cent lower at #61.50, a 20 month low.
Another telecoms equipment maker, Alcatel, announced it would close its two French mobile handset factories for the next two weeks to reduce inventory. The shares closed 1.3 per cent higher at #39.70.
Telecoms shares mostly edged a little higher. Deutsche Telekom shares rose 2.2 per cent to #25.90 as shareholders of VoiceStream in the US voted to accept DT's #24 billion takeover. France Telecom was up 2 per cent, Telia up 4 per cent and Telefonica up 1.3 per cent.
