Nokia Corp. shares declined around 8 percent to about $15 per share after the company offered a flat second-quarter outlook, news that comes as the company’s phone sales drag behind those of the rest of the industry.
“Nokia’s own first-quarter mobile device volume growth of 19 percent, slower than the market, reflected that Nokia was not able to fully exploit the usual seasonal market pickup in March,” said Jorma Ollila, Nokia’s chairman and chief executive officer. “As a result, our sales for the quarter did not meet our expectations, and our mobile device market share declined to 35 percent, based on our preliminary estimate. However, our long-term mobile device market share target remains unchanged at 40 percent.”
For the second quarter, Nokia said its net sales will be flat or slightly below its second-quarter earnings a year ago, but its mobile device sales and margins should improve toward the end of the year with the launch of additional phones. Nokia’s sluggish sales and outlook come as rival Samsung Electronics Co. Ltd. announced a stellar first quarter with sales of more than 20 million mobile phones.
Nokia last week announced its first-quarter earnings would be below expectations due to poor phone sales. The company blamed the decline on a lack of mid-range handsets. Nokia said it sold 44.7 million mobile phones in the first quarter.
In its first quarter, Nokia said its mobile phones and multimedia device divisions came in below expectations, but its enterprise and infrastructure businesses did better than expected.
Nokia said its overall sales declined 2 percent to about $8 billion compared with the first quarter of last year, although the company said it would have seen an increase if its results were adjusted to constant currency. Nokia said its operating profit was $1.3 billion with an operating margin of 17.2 percent.
“We are not satisfied with our sales development during the first quarter,” Ollila said. “I realize that improvements require additional effort and a lot of hard work, but I have confidence in the ability of the Nokia team to address and meet customer needs in all segments by further strengthening our product portfolio.”
