Nokia's first-quarter profit plunged 90 percent as the world's largest handset maker succumbed to the global slump in demand. The Finnish giant posted a net profit of just $161 million, compared with $1.58 billion in the year-ago period.
The company's sales fell 27 percent to $12.2 billion for the quarter, down from $16.77 billion in the first quarter of 2008. Handset sales were down 33 percent to $8.17 billion. However, the company did sell more phones than some analysts had predicted.
Nokia shipped 93.2 million devices, down sequentially from the 113.1 million units it shipped in the fourth quarter of 2008 and down 19 percent from the 115 million it sold in the year-ago quarter. The company's stock rose 8 percent to around $14.45 per share after the announcement.
Nokia's market share remained steady at 37 percent. The average selling price for its handsets dipped though to $85.85, down from $104 in the first quarter of 2008. Nokia maintained its forecast that the overall handset market would fall by 10 percent this year. In-Stat is predicting a far more dire 20.5 percent drop in global handset shipments in 2009.
However, the firm downgraded its view on the network infrastructure market, saying it expected the business to contract 10 percent this year. Nokia, which has a network infrastructure joint venture with Siemens--Nokia Siemens Networks--had previously predicted a 5 percent drop in the infrastructure market.
As analysts had expected, Nokia decreased its inventory in the quarter--a possible indication that the company will post a more predictable second quarter, and may even reverse its downward course. Additionally, Nokia CEO Olli-Pekka Kallasvuo confirmed that Nokia would "renew" its "portfolio meaningfully" by introducing mid-range and high-end phones to "cover more Qwerty and touch, and the combination of the two" by the end of the year. Nokia has lagged behind the other major handset makers in creating touchscreen phones.
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