Top handset maker Nokia warned on Friday second-quarter earnings would fall and sales could also drop as its patchy handset portfolio proves no match for tough competition, sending its stock sharply lower.
Nokia said second-quarter earnings per share (EPS) would be between 0.13-0.15 euros, well below the underlying figure of some 0.19 euros from a year ago and missing all expectations in a Reuters poll that called for an EPS of 0.18 euros.
The outlook confirms analysts' fears that Nokia, which makes more than one in three handsets sold globally, could lose more market share to rivals like U.S. Motorola and Korea's Samsung Electronics, which earlier on Friday posted record earnings.
Samsung said earlier it expects its market share in January-March to have risen by almost four percentage points to 14 percent, with sales to continue rising in the second quarter.
Nokia said that mobile phone volumes grew by a heady 29 percent annually in the first quarter, but the company saw growth of only 19 percent, hampered by the holes in its phones lineup.
"It does not look good. It is obvious that they are losing market share on mobile phones, and the guidance indicates that next quarter will be worse than we expected," said analyst Urban Ekelund at Redeye.
"The company will not be able to turn this around overnight, I think the share price will drop further from these levels," he said.
The Finnish firm posted January-March EPS of 0.17 euros, above an underlying 0.16 euros from a year ago and in line with a warning from April 6 that spooked investors as Nokia admitted it could not grow its profits quickly despite a booming market.
Nokia said group sales would be flat to lower in the second quarter versus expectations of a fall of three percent in the poll, as rivals exploit Nokia's weak offering of mid-priced phones with colour-screen and camera models of their own.
Nokia CEO Jorma Ollila reiterated that the firm aimed for a 40 percent share of the mobile phone market, but analysts said that looked daunting at present.
"Nokia's main priority must now be to stabilise its market share by Q3 and hope that it can reverse the current decline in Q4," said Ben Wood at Gartner Dataquest. "In the face of aggressive competition from Motorola, Samsung, LG and Siemens this is going ot be a challenging goal to achieve."