The handset hits keep on coming: Nokia Corp. on Thursday posted a 66 percent drop in profit for the second quarter, sending its stocks tumbling nearly 14 percent.
Net profit in the second quarter fell 380 million euros ($535 million) from 1.1 billion euros year-over-year.
The world’s No. 1 phone maker also said that gaining more market share for the second half of the year is unlikely, and it lowered its profit target for the next six months to 11.3 percent, down from analyst expectations of 17.4 percent. One bright spot: Its underlying earnings per share declined but exceeded analysts’ forecasts.
The fact that the margin squeeze is expected to continue for the rest of the year is evidence, according to analysts, that Nokia is preparing aggressive pricing strategies going forward.
Chief executive Olli-Pekka Kallasvuo said the industry is changing amid rabid competition and the convergence of smartphones and PCs, meaning that Nokia “must develop a new set of skills,” according to the Wall Street Journal.