Nokia, the world’s largest handset vendor, reported a 66 percent annual decline in net profit for second-quarter 2009 but claimed that demand in the overall mobile device market is “bottoming out.” The world’s largest handset vendor – which reported financials just hours after rival Sony Ericsson (see story below) – saw net profit decline to EUR380 million from EUR1.10 billion a year earlier but ahead of analysts’ expectations of EUR316 million, reports Dow Jones Newswires. Earnings per share came in at EUR0.10 compared with EUR0.29 a year earlier, also slightly ahead of expectations of EUR0.09. “Competition remains intense, but demand in the overall mobile device market appears to be bottoming out,” Nokia CEO Olli-Pekka Kallasvuo said in a statement. Net sales for the quarter stood at EUR9.9 billion, down 25 percent year-on-year but up 7 percent sequentially, missing expectations of EUR10.11 billion. Mobile device volumes showed similar trends; 103.2 million units were shipped in the quarter, down 15 percent year-on-year and up 11 percent sequentially. Nokia estimated its mobile device market share at 38 percent, down from 40 percent in 2Q08 but up from 37 percent in 1Q09. Its smartphone market share was estimated to have risen to 41 percent.
Nokia said it expects industry mobile device volumes in the current quarter (3Q09) to be at approximately the same level or up slightly sequentially. It added that its devices market share would reman approximately flat in 2009, compared with 2008, a slightly more pessimistic update to its earlier target to increase its market share in 2009. “It takes a while to turn around handset portfolios and they are struggling at the moment particularly to get their high-end product correct,” Stuart O’Gorman, an investment manager at Henderson Global Investors, told Bloomberg. “At some stage Nokia can pull itself out, but it may take longer than people are hoping for.” Dow Jones Newswires notes that Nokia’s shares were down 7 percent in response to the results. The shares have lost a third of their value over the past 12 months as slumping demand has cut into sales and profits.