Nokia profits take a beating

The world's largest maker of mobile phones has reported a 16% drop in net profits in the first quarter after weak handset sales.

    Analysts say the Finnish firm has failed to grasp market trends

    The Nokia share price, which already had shed almost 20% after it issued a shock profit warning on 6 April, was down more than 8% at $14.74 on the Helsinki stock exchange one hour after it announced a first-quarter net profit of $976 million.

      

    That compares with $1166 million a year ago.

      

    The Finnish company said its handset volume growth during the first three months of the year reached only 19%, compared with 29% for the overall mobile industry.

      

    Chief executive Jorma Ollila said he was "not satisfied with our sales development", and acknowledged that the company was not able to "fully exploit the usual seasonal market pick-up in March".

     

    Strong euro

      

    Sales fell by 2% to $7.9 billion, as the strong euro impacted results.

      

    Analysts have said that Nokia's failure to grasp market trends was at the root of its weak sales, citing in particular its lack of a fold-out clamshell phone and handsets with high-quality cameras which have been highly popular.

      

    Nokia's first real clamshell phone, presented last year, is just about to be launched in stores, years after its main competitors launched theirs.

      

    The company's market share dropped to 35% in the first quarter, Ollila said, reiterating, however, that the company's goal remains unchanged at 40%.

      

    The company said its operating profit plunged by 17% to $1.35 billion, while earnings per share dropped to $0.20 from $0.24 a year ago.

    SOURCE: Reuters


    YOU MIGHT ALSO LIKE

    How Moscow lost Riyadh in 1938

    How Moscow lost Riyadh in 1938

    Russian-Saudi relations could be very different today, if Stalin hadn't killed the Soviet ambassador to Saudi Arabia.

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    The War in October: What Happened in 1973?

    The War in October: What Happened in 1973?

    Al Jazeera examines three weeks of war from which both Arabs and Israelis claimed to emerge victorious.