Shares in mobile phone maker Nokia plunged today after it posted weaker second-quarter earnings and warned a soft dollar would hit sales and profits at its main handset unit.
The weak outlook confirms handset makers are grappling with slow growth due to uneven demand and a reluctance of consumers to buy expensive models as economies remain shaky.
Nokia's reiterated forecast of 10 per cent industry growth is now based on hopes for the seasonal sales uptick at Christmas. Nokia, whose mobile phone unit generates 78 per cent of sales and all of the firm's profits, forecast overall pro forma earnings of 15 to 17 cents per share in the third quarter versus 18 cents a year earlier.
The share was off 10.6 per cent at €14.08, dragging down European equity markets.
For the second-quarter to end-June, analysts said they were disappointed by the performance of the handset business, which produces almost two out of every five phones sold worldwide.
Operating profit at the mobile phones unit (NMP) - although up 9 per cent year-on-year to €1.28 billion - missed all analysts' expectations.
Sales of €5.5 billion were a touch below consensus, giving a margin of 23 per cent, 1 per cent below quarter one. Nokia said it saw no turnaround in sight, with third-quarter sales at the unit likely to fall by 15 to 20 per cent and a slight loss expected.