Nokia reported sharply higher second-quarter sales and profits today, as expected, but failed to satisfy investors after rival Motorola's impressive earnings and outlook overnight.
Nokia, the world's largest mobile handset maker, sold 78.4 million phones in April-June, 29 per cent more than a year ago.
Shipments grew slightly faster than the market, which increased 26 per cent, according to Strategy Analytics.
But Motorola, its closest rival, reported 53 per cent growth in quarterly shipments for the quarter and said it expected the demand trend to continue in the third quarter.
"Motorola is a very tough rival at the moment. And that's the reason why Nokia's volumes were not higher," said FIM Securities analyst Jussi Hyoty.
Nokia's underlying earnings per share rose to €0.23 from 0.17 a year ago, compared with analysts' average expectation of €0.24.
"They increased marketing quite heavily in the second quarter ... That's why they came in a bit less than consensus on EPS," Mr Hyoty said.
Nokia spent €851 million on marketing in the quarter, up from €688 million a year earlier, in keeping with its forecast for a material increase. Nokia's April-June sales jumped to €9.8 billion from €8.1 billion in the same period a year earlier, a shade above analysts' average forecast.
The Finnish firm, which sells more than a third of all phones across the world, benefits from its early entry into emerging markets with a broad line-up of easy-to-use, cheap models. But in developed markets, Motorola, with its top-selling Razr model, and others have attacked the Finnish firm with very thin mobile phones.