Nokia warned today of weaker sales and earnings in the first quarter due to poor demand for networks equipment and consumer reluctance to buy colour-screen phones amid tight economic conditions.
Nokia shares fell 7 per cent to €10.68, and Nokia is down some 30 per cent this year. Rival Ericsson dropped 13 per cent to Swedish crowns.
Nokia warned it expected January-March sales to decline slightly year-on-year from €7.01 billion a year ago. In January, the Finnish-based technology bellwether warned sales would be slightly weaker than growth of flat to nine percent.
Nokia makes more than one in three mobile phones sold worldwide each year and has a global market share more than double that of its nearest rival Motorola.
The company said the downgrade was largely due to weaker than expected sales of networks, with this division expected to post a loss in the first quarter, and costs related to the roll-out of high-speed 3G networks.
To counter the effects of weaker demand for its products and poor general conditions, Nokia has cut staff, closed some plants and reined back spending, particularly on research and development in its networks division.
Nokia, which last year cut its sales outlook six times and reported an annual fall in revenues for the first time in more than a decade, also trimmed its forecast of pro forma earnings per share in the quarter to 0.15-0.17 cent from a previous target of 0.15-0.19 cent.
Last year it had an EPS of 0.19 in January-March.
Nokia and its peers are suffering from the slowdown of the global economy, with key markets such as the United States and Germany in poor shape. Consumers are also reluctant to swap their old phones for new and more sophisticated ones.