Nokia’s shares nose dive after sales warning
Nokia has dropped its sales outlook, sending its share price plummeting.
Nokia’s share price had dropped 18% so far today, below its 1998 price, and was continuing to fall at the time of publishing.
The troubled handset maker said second quarter sales would be “substantially below” predictions of €6.1 billion, adding margins would also shrink by 6% to 9%.
We recognise the need to deliver great mobile products, and therefore we must accelerate the pace of our transition
The company said it would not provide an annual sales target for the year, “given the unexpected change in our outlook”.
Nokia isn’t specifically blaming new partner Microsoft for the problems, instead citing a market shift towards cheaper devices and competitors’ “pricing tactics”.
While the company said it “remained pleased” with the progress of its move to Windows Phone 7, it acknowledged the transition needed to happen sooner rather than later.
“Strategy transitions are difficult,” CEO Stephen Elop said. “We recognise the need to deliver great mobile products, and therefore we must accelerate the pace of our transition.”
“Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011,” he said, adding that the market was waiting for another mobile platform.
“There is a clear desire from operators around the world for a third horse to create a sense of balance in the environment,” he said in a conference call.
The company said it would deliver previously announced cuts of €1bn “as quickly and effectively as possible” and had cut prices on smartphones to better compete.
Nokia’s share price