Nokia profit misses estimate

Nokia Oyj, the world's biggest maker of mobile phones, posted a first-quarter profit that trailed estimates on costs for pensions and closing a plant, and forecast the handset market's value will shrink in euro terms this year.

Nokia dropped as much as 7.5 percent in Helsinki trading. Net income rose to 1.22 billion euros from 979 million euros a year earlier, Espoo, Finland-based Nokia said in a statement yesterday. The average profit estimate of 14 analysts surveyed by Bloomberg was 1.38 billion euros.

Chief Executive Officer Olli-Pekka Kallasvuo increased Nokia's market share to 40 percent last year by selling handsets for less than $50 and pricier models with satellite navigation at the expense of rivals including Motorola Inc. Nokia's stock fell 24 percent in Helsinki in the first three months of the year, the biggest drop since the second quarter of 2004, on concern sales growth in developed markets such as Europe will slow.

"Nokia expects the mobile device market to decline in value in Euro terms in 2008, compared to 2007," Nokia said. It cited "the negative impact of the recently weakened US dollar, the general economic slowdown in the US, and possibly going forward some economic slowdown in Europe."

Nokia fell as much as 1.58 euros to 19.38 euros in Helsinki and traded at 19.59 euros as of 1:29 pm. Before yesterday, the stock had dropped 21 percent this year, valuing Nokia at 79.6 billion euros, compared with a 20 percent slide in the Dow Jones Europe Stoxx Technology Index. Last year was the best for the stock since 1999, with a 71 percent gain.

Agencies

(China Daily 04/18/2008 page17)