Nokia's profit drops 69% amid weak sales, uncertainty

Nokia saw its fourth quarter net profit drop 69 percent. The Finnish firm's quarterly results were weakened by a drop in sales. 

The world's largest handset maker reported a net profit of $746.3 million, down from $2.38 billion in the fourth quarter of 2007. The company reported sales of $16.4 billion in the quarter, down from $20.36 billion in the year-ago period and significantly below expectations. The company said it shipped 113.1 million units in the quarter, down 15 percent from the 133.5 million it shipped in the fourth quarter last year.

The average selling price of Nokia's handsets fell to $92 from $93.28 in the third quarter of 2008, and the company's market share declined to 37 percent from 38 percent in the third quarter.

Nokia also predicted a far more dismal 2009 than it had in the waning months of 2008, when it issued several profit warnings about the fourth quarter. In December Nokia issued a profit warning, which had been revised down from a previous weak estimate, and said it expected its handset sales would fall 5 percent from 2008 levels. Now, the company is predicting a 10 percent drop. While the company remains the industry leader in terms of sales volume, the weakness and uncertainty mirrors other handset makers like Sony Ericsson and LG, which have already reported fourth quarter losses.    

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