HELSINKI, Oct 16 (Reuters) - Investors in Nokia are hoping a roaring cellphone market will make up for fierce price competition and a weak dollar when the world's top mobile phone maker reports earnings later on Thursday.
The third-quarter numbers from the technology bellwether come after rivals Motorola , Samsung <05930.KS>, Siemens and Sony Ericsson <6758.T> have all said handset demand in the July-September period was buoyant.
On Monday Motorola, the world's second biggest mobile phone maker, posted a profit twice that expected by Wall Street due to strong handset demand, and Samsung told Reuters it was raising its industry outlook as phone demand was outstripping supply.
"There are two options: either the market is growing rapidly or Siemens and Motorola are growing rapidly. I vote for the first option," said Mandatum Stockbrokers analyst Erkki Vesola, who rates Nokia shares as an "accumulate".
Nokia is expected to announce headline earnings before exceptionals and goodwill writeoffs for the July-September quarter of 0.17 euros per share, according to a Reuters poll, down from 0.18 euros a year ago and at the top end of the company's previously given range of 0.15-0.17 euros.
Results are due around 1 p.m. local time (1000 GMT).
But as Nokia already gave a quarterly trading statement a little over a month ago, saying that despite good demand phone prices were pressured by competition and the weak dollar, analysts said they would now be looking for the company to give guidance for the current, fourth quarter.
The strong demand in the third quarter, fuelled in part by robust emerging markets such as India, is expected to spill over into the fourth, bolstered by the traditional Christmas rise in sales and a new array of phones coming to mature markets.
Such phones offer built-in cameras, colour screens and, in the case of Nokia's N-Gage handset, mobile gaming possibilities.
"We expect the company to...deliver upbeat Q4 guidance," Nordea Securities said in a research note.
"Our Q4 optimism stems from the fact that Nokia will have a strong product portfolio available for the Christmas period... (we forecast) almost flat year-on-year sales for Nokia Mobile Phones despite weak (average selling prices)," it said.
Reflecting the warming sentiment, Nokia shares have added some 10 percent since end-September.
STRONG COMPETITION, WEAK DOLLAR
But while demand is on the rise competition remains cut-throat, with Motorola, Samsung and Siemens all out with new models ahead of Christmas.
In addition, since Nokia's September trading statement the dollar has further weakened versus the euro, meaning euro-zone-based Nokia gets less for each phone it sells.
And while Christmas usually brings demand from gift-shoppers, the trend is towards lower-end models that yield less profits than models boasting gadgets such as cameras.
"Q4 typically has a more low-end mix, which should be exacerbated by increasing shipments to emerging markets," Merrill Lynch said in a research note, predicting a six-percent fall in average selling prices (ASPs) in the quarter versus Q3.
However, according to the Reuters poll analysts expect revenues at Nokia Mobile Phones (NMP) to slip by only around one percent year-on-year in the fourth quarter, thanks to good unit sales, and analysts said that if Nokia can meet that there could be upside in the share price.
"If they can come up with anything positive there, it would give the share a boost," Mandatum's Vesola said. "The fourth-quarter momentum should favour Nokia."
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