Jan. 24 (Bloomberg) -- Nokia Oyj will probably say this week profit fell and Siemens AG may report growth waned amid expectations that the average earnings increase among Europe's largest companies will slow to 10.5 percent this year.

Nokia will report a 27 percent drop in fourth-quarter profit on Jan. 27, a Bloomberg analyst poll shows, the same day that Siemens and Royal Philips Electronics NV publish results. Other Dow Jones Stoxx 50 companies reporting this week are SAP AG, AstraZeneca Plc and Banco Bilbao Vizcaya Argentaria SA.

Earnings growth of 10.5 percent among Dow Jones Stoxx 600 members this year compares with 27 percent in 2004, when a surge in oil prices helped profits at companies such as BP Plc, says London-based FactSet JCF Group. Qualcomm Inc., the world's No. 2 maker of chips that run mobile phones, said Jan. 19 profit will miss estimates, suggesting the industry may be slowing globally.

``I expect guidance from companies to be cautious, especially from semiconductor makers and Nokia,'' said John van den Berg, a fund manager at AZL Vermogensbeheer in Heerlen, Netherlands, which manages $7 billion and owns shares in Nokia, the world's largest maker of mobile phones, Philips and SAP.

Siemens, Germany's largest engineering company, may say net income in its fiscal first quarter gained 15 percent, according to the median forecast of 16 analysts surveyed by Bloomberg News. The year earlier, earnings increased by 39 percent.

Prices, Profitability

Infineon Technologies AG, Europe's No. 2 semiconductor maker, today reports fiscal first-quarter earnings and may detail cost cuts at its communications unit. The Munich-based company said Jan. 12 profit and sales missed analysts' estimates after inventory increased and the falling dollar crimped sales.

Net income at Nokia, based in Espoo, Finland, probably fell to 848 million euros ($1.10 billion), according to the median forecast of 11 analysts surveyed by Bloomberg. Sales probably slid 3.6 percent to 8.47 billion euros, the survey showed.

``My key concern for Nokia is average selling prices and margins, which will come under further pressure this year,'' said Peter Olofsen, an analyst at Effectenbank Stroeve in Amsterdam, who recommends investors sell Nokia shares.

Two suppliers to Nokia -- STMicroelectronics NV and Philips -- will report before the Finnish company. STMicroelectronics, Europe's largest semiconductor maker, posts earnings on Jan. 26. STMicroelectronics, whose largest customer is Nokia, said Jan. 10 fourth-quarter profitability missed forecasts because of the stronger euro, lower prices and lower-than-expected factory use.

Credit, Investment

Philips, whose chips and screens are used in Nokia phones, is likely to say Jan. 27 it had a seventh straight quarterly profit after the Amsterdam-based company sold more chips and LCD screens and Chief Executive Gerard Kleisterlee lowered costs.

The European Central Bank on Jan. 13 kept its main lending rate at a six-decade low of 2 percent to support the region's economy. Europe still depends on cheap credit to fuel investment and spending as a global slowdown curbs export growth and consumption is held back by unemployment near a five-year high.

The Stoxx 600 technology group slid 19 percent in the past year, while the entire index increased by 6.9 percent.

``The outlook of many of the companies that we've seen, many of them in the technology, hardware and semiconductor sectors, have been very cautious,'' said Dirk Thiels, who oversees $10.5 billion at KBC Asset Management SA in Brussels. ``It's quite obvious the companies are looking with a little bit more caution on their sales for the next quarters.''

`Odd One Out'

The company, whose chips are used to boost battery life in Apple Computer Inc.'s iPod, said in October fourth-quarter sales in U.S. dollar terms at its semiconductor division would stagnate as demand slows for DVD players and mobile phones.

SAP, the world's largest maker of business-management software, is expected to say Jan. 26 fourth-quarter net income rose 21 percent to 510 million euros, according to the median forecast of 12 analysts surveyed by Bloomberg News.

``SAP may be the odd one out in a positive way, they are taking market share from rivals,'' said AZL's Van den Berg.

Europe's biggest mobile-phone operators are this week expected by analysts to report subscriber growth in the last three months of 2004.

Vodafone Group Plc, the world's largest, probably added 2.9 percent, or 4.3 million customers, taking its total to 151 million. Deutsche Telekom AG's T-Mobile unit may have added 2 million users, for a total of 69.2 million. MMO2 Plc, the U.K.'s No. 2, probably signed up 4.3 percent more customers, swelling its base to 23 million.

Mexican Earnings

Among companies in other industries reporting in coming days, Bilbao, Spain-based Banco Bilbao Vizcaya Argentaria, the country's No. 2 bank, probably will say profit rose by one-third in the fourth quarter, helped by earnings from Mexico.

Novartis AG, Europe's fourth-biggest drugmaker, on Jan. 20 was the first Dow Jones Stoxx 50 company reporting earnings. The company said fourth-quarter net income rose 1 percent to $1.38 billion, the slowest profit growth in five quarters.

To contact the reporter on this story: Joost Akkermans in Amsterdam at jakkermans@bloomberg.net.

Last Updated: January 23, 2005 19:10 EST