E-Commerce News: Wall Street: Nokia Shares Dip on Disappointing Profits

Nokia, the world's largest maker of mobile phones, reported an increase in earnings of 25 percent, but that wasn't enough to make analysts happy. The company's stock price sank on the Finnish stock exchange after the report, which came in below expectations.

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The world's biggest mobile phone maker, Nokia (NYSE: NOK) , on Thursday said its first-quarter earnings rose 25 percent on demand for cheaper phones in emerging markets.

The results came in below analysts' expectations, and Nokia's share price fell more than 6 percent to 19.59 euros (US$31.20) in Helsinki, Finland.

Net profit was 1.2 billion euros ($1.9 billion) in the first three months of the year, up from 980 million euros ($1.56 billion) on the same period of 2007.

Rising Revenue

Revenue increased 28 percent to 12.6 billion euros ($20 billion), from 9.8 billion euros ($15.6 billion) a year earlier, with strong growth of handset sales in Asia, the Middle East, Africa and Latin America.

However, sales of cheaper handsets in those regions continued to push down the closely watched average selling price of Nokia's mobile devices. It fell to 79 euros ($125) in the period, from 89 euros ($141.70) in the same period last year, and 83 euros ($132.16) in the previous quarter.

Nokia also said its market share had fallen slightly to 39 percent, from 40 percent in the previous quarter.

Nokia said it sold more than 115 million mobile devices in the three-month period -- an increase of 27 percent from 2007.

Market Growing

The Finnish company expects the mobile phone market worldwide to grow by some 10 percent in 2008 from its 2007 estimate of 1.14 billion units, but added that the average selling price across the industry would continue to fall during the year.

Nokia CEO Olli-Pekka Kallasvuo said he was pleased with the quarterly result and gave an upbeat forecast for the rest of the year.

"The overall device market developed as expected, with the greatest demand in emerging markets where our position is very strong," Kallasvuo said. "The competitiveness of our product portfolio is reflected in our market share and we target market share gains in the second quarter."

But he said that Nokia would have "no major new products" in the second quarter.

Nokia last year sold nearly 440 million handsets accounting for 40 percent of all global cell phone sales. It is based in Espoo near the Finnish capital and employs 112,000 people worldwide.