Nokia shares drop despite 25% profit rise

Shares in Nokia plunged more than 13.5% after the world's largest mobile phone maker downgraded its forecast for the global handset market and posted lower than expected earnings in the first quarter.

An Associated Press report said Nokia reported a net profit of €1.2 billion (US$1.9 billion) in the first three months of the year, 25% more than €1 bilion (US$1.6 billion) in the same period in 2007, but below analysts' forecasts. Markets had been expecting a better result: a Factset analyst poll, cited by Dow Jones Newswires, had forecast a 42% rise in profit

Revenue grew 28% to €12.5 billion (US$20 billion) from €9.8 billion (US$15.6 billion) a year earlier, with strong growth of handsets sales in Asia, the Middle East and Africa.

The report quoted the company saying that its market share slipped from 40% in the October-to-December quarter to 39% in the first quarter this year. But it sold 115 million mobile devices in the first quarter, up 27% from a year earlier, and its market share was 3 points higher than in the first quarter a year ago.

Nokia stock closed at €18 (US$28.76) in Helsinki after the company cautioned that the industry worldwide would be hit by poor economic conditions.

Nokia CEO Olli-Pekka Kallasvuo said he was satisfied with the first-quarter result, despite the poor response from investors.