Nokia has warned that its second quarter sales and operating margins will be “substantially” below previous guidance, after sales and prices fell.
The mobile handset maker, Europe’s largest technology firm, saw its stock market value dive by 18 percent following the announcement. The company is now valued at its lowest for 13 years.
Stephen Elop, Nokia’s chief executive, said 2011 was “going to be a difficult year to get through”.
Nokia said it would be around “break even” point at the end of the quarter, much lower than its six to nine percent margin target.
It said its devices and services revenues for the quarter would be substantially below its previously expected range of €6.1 billion to €6.6 billion, thanks to lower average selling prices and fewer users buying its phones.
Geoff Blaber, an analyst at telecoms research firm CCS Insight, told the Financial Times that Nokia was “under attack from all sides”. Nokia shares have lost a third of their value in the last six months, and more than 80 percent since 2000, the newspaper reported.
The news comes as Nokia moves to a strategy of selling phones built around the Microsoft Windows Phone 7 operating system. The company said it has "increased confidence" that the first of its smartphones with Windows Phone will ship in the fourth quarter.