ESPOO, Finland-Nokia Corp. posted a quarter largely in line with expectations, but its reliance on low-end phone sales appeared to scare investors. The company’s stock was down more than 10 percent following its second-quarter report to about $15.94 per share.
“This growth came primarily from emerging markets where low-end products predominate and pricing pressures are currently intense, industry average selling prices continued to edge downwards,” said Jorma Ollila, the company’s chairman and chief executive officer. “This was certainly the case for Nokia in the second quarter, which in turn impacted our profitability. We currently believe these trends will continue for both the industry and Nokia for the remainder of the year.”
Low-end phones typically carry lower profit margins.
Nokia posted companywide revenues of $9.8 billion, up 25 percent over the same quarter last year. The company’s net income also increased to $971 million. Nokia sold 60.8 million phones in the quarter, which it said gives it a 33-percent worldwide market share. Due to robust handset sales, the company upgraded its full-year expectations for industrywide handset sales by 20 million to about 760 million units.
In Nokia’s Networks business, the company reported an increase in sales of 6 percent to $1.9 billion. However, the company’s operating profit dropped by 8 percent.
