Outlook worries hit Nokia shares

Nokia said new products would boost performance in the second half of 2008

Shares in Nokia have fallen 10% after the Finnish mobile firm reported weak US sales and cast doubt over industry growth prospects this year.

Its US handset sales fell 46% in the first quarter of the year and, despite strong sales in other regions, Nokia's global market share dipped slightly.

It also warned that the value of total mobile phone sales, denominated in euros, could fall this year.

However, Nokia saw profits jump 25% to 1.22bn euros ($1.95bn; �980m).

Caution

The firm's cautious comments about the industry's sales outlook forced its shares down sharply on the Helsinki Stock Exchange.

"The change from our previous estimate for value growth for this market primarily reflects 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," it said.

Nokia's main market - Europe - is slowing down and the company now gives clear evidence of that Janne Rantanen, Carnegie

Nokia enjoyed robust sales in the first three months of the year, particularly in emerging markets in Asia and Latin America.

Total shipments were up 27% compared with the same period last year, but were actually 13% lower than in the final quarter of 2007 reflecting a slowdown in some markets.

Nokia's market share dipped from 40% at the end of last year to 39% although the firm said it expected this figure to rise again in the second quarter.

Its average sales price also fell, on a quarter-by-quarter basis, from 83 euros to 79 euros per handset.

Nokia expects mobile industry volume sales to rise 10% this year but analysts focused instead on a possible decline in sales values.

"The possibility for some economic slowdown in Europe going forward is what we have been afraid of," Janne Rantanen, an analyst at Carnegie, said in reaction to the results.

"Nokia's main market - Europe - is slowing down and the company now gives clear evidence of that," he added.

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