HELSINKI, Finland — Nokia reported a 25 percent jump in first-quarter earnings on new demand from emerging markets, but the world's top mobile phone maker missed expectations and gave a downbeat global forecast, sending its shares plunging.
Nokia Corp. posted a net profit of 1.2 billion euros ($1.9 billion) in the first three months of the year, up from 980 million euros during the same period in 2007.
Revenue increased 28 percent to 12.6 billion euros ($20 billion), from 9.8 billion euros a year earlier, with strong growth of handsets sales in Asia, the Middle East, Africa and Latin America.
Sale volumes grew more than 40 percent in the Asia-Pacific region which overtook Europe as the company's biggest market with 34 million units sold. That was more than a third of all Nokia's mobile phone sales.
But the phones sold in emerging markets tend to be cheaper, pushing push down the closely watched average selling price. It fell to 79 euros ($125) in the period, from 89 euros in the same period last year and 83 euros in the previous quarter.
Nokia profits fell short of the 42 percent increase predicted by analysts polled Dow Jones Newswires. Sales growth matched expectations.
The weaker-than-expected profits, paired with a gloomy outlook for 2008, sent shares down 10 percent to 18.86 euros ($30.04).
Even though the Finnish company said it expects the global mobile phone market to grow in volume by 10 percent in 2008, it said the market would lose value in euro terms compared with 2007 because of a weak U.S. dollar, an economic slowdown in the U.S, and possibly in Europe.
Nokia changed telephone infrastructure market outlook to "flat," from a previous estimate of "very slight growth."
"Like many European companies that sell abroad where goods are valued in dollars or currencies linked to the dollar, Nokia is suffering," said Pasi Vaisanen, an analyst at Glitnir Bank. "We've never seen it more clearly than now."
Europe, with 26 million units, was Nokia's second biggest market in the period, before China with 21 million units. Its troubled North American market continued to slump, with a 46 percent drop in sales to a mere 2.6 million mobile devices sold in the quarter.
"North America, which despite a slowdown still accounts for 16 percent of global handset demand, remains a serious problem-child for Nokia," said Neil Mawston of Strategy Analytics.
Nokia sold 115 million mobile devices in the quarter _ up 27 percent from a year earlier. Its market share grew 3 points to 39 percent year-on-year, but fell from 40 percent in the fourth quarter of 2007.
"The overall device market developed as expected, with the greatest demand in emerging markets where our position is very strong," Nokia CEO Olli-Pekka Kallasvuo said.
He said Nokia expects to gain market share in the second quarter.
Nokia last year sold nearly 440 million handsets accounting for 40 percent of all global cell phone sales.
World No. 5 handset maker LG Electronics of South Korea on Wednesday said record mobile phone sales helped the company swing to a profit in the first quarter.
It appears that almost everymarket has turbulence to deal with
