HELSINKI, Finland, June 11 (UPI) -- Nokia, the world's largest mobile phone maker, warned Tuesday that its sales would fall in the second quarter due to weak demand for handsets and network equipment.
Nokia, which makes more than one in three mobile phones sold globally, said that, based on developments during April and May, it expects second-quarter net sales to decline 2 percent to 6 percent year-on-year against a previous target of 2 percent to 7 percent growth in the quarter.
Sales of Nokia mobile phones in the second quarter are expected to grow by zero to 4 percent year on year instead of the previously stated 5 percent to 10 percent.
Nokia Networks sales are expected to decline by 20 percent to 25 percent, compared with earlier guidance of a decline of 5 percent to 10 percent year on year.
In mobile phones, Nokia expects its market share for the second quarter to increase (both sequentially and year on year) to the level of 38 percent during the quarter, with the company's year-on-year volume growth exceeding 10 percent.
The company estimates overall mobile phone market volume to grow in the second quarter by about 5 percent from the 89 million users in the first quarter.
In the second quarter, Nokia mobile phones's pro forma operating margins are expected to be above 20 percent, "demonstrating Nokia's ongoing strong product competitiveness in this market," the company said.
Nokia Networks sales are expected to be lower than estimated mainly due to cautious investments among operator customers.
But, despite the warning, Nokia stuck by its earnings targets for the second quarter.
Nokia said it expects to post pro forma earnings in the range of 17 cents to 19 cents a share in the second quarter.
The company in April lowered its target for the second quarter from an earlier forecast of sales growth of at least 10 percent.
"Nokia expects its market share for the second quarter to increase, both sequentially and year-on-year, to the level of 38 percent during the quarter," the company said.
Nokia will issue its second-quarter earnings results on July 18.
