Nokia cuts forecast again, blames competition

Michael Carroll | June 17, 2010

telecomseurope.net

Nokia has downgraded its financial forecasts for the second time this year, admitting that Q2 sales could struggle to meet the lower end of its previous guidance.

The announcement on Wednesday sent its stock plummeting nearly 11% to $8.77 at the close, down $1.05, though it recovered 3 cents in after-hours trading.

Nokia said net sales could be lower than the €6.7-€7.2 billion ($8.2b-$9.9b) it previously predicted, while non-IFRS operating margin could struggle to reach the 9%-12% forecast for the quarter.

The announcement highlights Nokia’s inability to create a smartphone that can compete with the iPhone, or a new operating system that can rival Android, BlackBerry or the iPhone.

A “competitive environment, particularly at the high-end of the market, and shifts in product mix towards somewhat lower gross margin products” is impacting on sales the firm said.

Additionally, the weaker Euro had increased operating expenses.

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