Nokia cuts its profit forecast

City A.M. Reporter
THE world&rsquo;s top mobile phone maker Nokia yesterday cut its forecast for second half profit and 2009 market share, sending its shares sharply lower.<br /><br />Nokia, which is facing tough competition from the likes of Apple, Samsung and RIM, scaled back its second-half underlying operating profit margin forecast for its key phone unit to the first-half level of 11.3 per cent, from 13-19 per cent previously.<br /><br />Nokia also cut its forecast for 2009 market share at its phone business, seeing it now on a par with last year, compared with an earlier forecast for a rise.<br /><br />&ldquo;There is the impression that Nokia concedes that the competition in the market place is heating up in the second half... that is related both to the reduced margin outlook and the market share outlook,&rdquo; said West LB analyst Thomas Langer.<br /><br />Nokia&rsquo;s underlying earnings per share slumped to &euro;0.15 (13p) from &euro;0.37, but beat the average forecast of &euro;0.13 in a poll of 31 analysts.<br /><br />The handset industry this year is facing its worst downturn ever, and market number five Sony Ericsson also reported a deep loss for April-June yesterday.<br /><br />Sony Ericsson posted a pre-tax loss of &euro;283m, in line with expectations, including &euro;1m in restructuring charges.<br /><br />The firm said cost cuts and a better product mix had contributed to losses shrinking from the &euro;358m of the previous three months.<br /><br />&ldquo;As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson,&rdquo; said Sony Ericsson president Dick Komiyama.<br /><br />He added that the company had started to see signs of the handset market stabilising.