Nokia lowers outlook, shares drop

Nokia Corp. on Wednesday warned that heavy competition will hit first-quarter performance, especially in developing markets, and that it expected no improvement in the second quarter. The news sent shares down 18 per cent.

The Finnish company cited "multiple factors" that had a negative impact on sales of cellphones, including in the smartphone sector, "particularly in India, the Middle East and Africa and China."

Nokia said operating margins in the first quarter were "approximately negative three per cent, compared to the previously expected range of 'around break-even, ranging either above or below by approximately two percentage points.'" It gave no other figures.

Shares in the company fell to3.13 ($4.13) in Helsinki after the announcement.

Nokia CEO Stephen Elop described the performance as "disappointing" for the struggling company that hoped to pose a new challenge in the highly competitive smartphone sector with new Windows-based Lumia smartphones launched in Europe, the U.S. and China.

"Our disappointing devices and services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our devices and services business continues to be in the midst of transition," Elop said.

"Within our smart devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success.

On Wednesday, Nokia unveiled a new version of the recently launched Nokia Lumia 610 which will give customers near field communication technology, or NFC, which allows users with similar technology to exchange data on their handsets and make payments.