Tags: EU | Finland | Nokia | Profit | Warning

Nokia Warns Earnings Will be Worse Than Expected

Tuesday, 31 May 2011 08:34 AM

Nokia Corp. said Tuesday its second-quarter earnings will be worse than earlier expected because of falling sales and tough competition in the smartphone market.

Shares in the company plunged more than 10 percent on the news, to 5.18 euros ($7.45) in afternoon trading in Helsinki.

The world's largest mobile phone maker said its performance in April through June will be "substantially below its previously expected range of 6.1 billion euros to 6.6 billion euros for the second quarter 2011."

The Finland-based company has been struggling against tough competition in the top-end smartphone market, especially against Apple Inc.'s iPhone, Research in Motion's Blackberry and on the software front against Android which has emerged as the top choice for phone makers that want to challenge the iPhone.

Nokia said that operating margins in the second quarter will be "substantially below its previously expected range of 6 percent to 9 percent ... primarily due to lower than previously expected net sales."

In the full-year the company said it was no longer "appropriate to provide annual targets for 2011."

Nokia said it is taking immediate action to address the issues that are affecting its devices and services division as its "high-level strategic objectives and targets remain unchanged."

In a major strategy move, Nokia in February announced major cooperation with Microsoft and said it would produce the first Nokia Windows cellphone before the year-end.

"Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition," CEO Stephen Elop said. "Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011."

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Nokia Corp. said Tuesday its second-quarter earnings will be worse than earlier expected because of falling sales and tough competition in the smartphone market. Shares in the company plunged more than 10 percent on the news, to 5.18 euros ($7.45) in afternoon trading in...
EU,Finland,Nokia,Profit,Warning
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2011-34-31
Tuesday, 31 May 2011 08:34 AM
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