Economy hits Nokia as profit and sales slump

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Nokia today reported its second quarter results, showing a 62 per cent drop in operating profit and a 24 per cent slump in net sales.

The Finnish mobile maker tried to paint a slightly rosier picture with the results, saying that, on a quarter-by-quarter basis, profit and sales were actually up by nearly seven per cent and 50 per cent respectively.

Net sales tallied in at €9.9 billion, while Nokia’s estimated share of the mobile device market fell slightly from 40 per cent a year ago to 38 per cent during the quarter.

“Nokia put in a solid performance in what was another tough quarter. We increased our share of the global mobile device market sequentially to an estimated 38 per cent and grew our smartphone market share to an estimated 41 per cent," said Olli-Pekka Kallasvuo, Nokia’s chief executive, in a statement.

"As a result of strong operational execution, underlying operating margins improved sequentially in all segments," he added. "Competition remains intense, but demand in the overall mobile device market appears to be bottoming out. As before, we are continuing to tightly manage our operating expenses.”

“We are balancing short-term priorities with our longer-term growth ambitions as elements of the mobile handset, PC, internet and media industries converge to form a new industry. Consumers will increasingly expect devices and services designed as integrated solutions. To capture this opportunity we are accelerating our strategic transformation into a solutions company.”

As for the future, Nokia expects its market share to stay roughly the same during its next quarter, while it predicted that overall industry device shipments to drop by 10 per cent from their 2008 rate.

Nokia’s results fall on the same day that fellow device maker Sony Ericsson reported a €283 million loss for its second quarter.

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