Nokia is having a bad week.
The worlds largest cell phone company, already facing a management crisis with CEO Olli-Pekka Kallasvuo reported to be on his way out, now must contend with worse-than-expected quarterly losses.
On Thursday, Nokia reported a 40 percent drop in net income down to 227 million euros, or $291 million. The decline was steeper than predicted, even though Nokia had warned in June that this round of results would be somewhat dire. Still, sales rose 0.9 percent to 10 billion euros and the company kept its guidance steady for the rest of 2010.
Nokias problem is that it has yet to launch a device to rival the ever-popular Apple iPhone Nokias share values have fallen two-thirds since the iPhone was introduced in 2007. Thats one reason why analysts and Nokia insiders say its time to replace Kallasvuo. Nonetheless, Kallasvuo promised on Thursday that a new handset is on the way.
In smartphones, we continue to renew our portfolio, Kallasvuo said in a prepared statement. We believe that the Nokia N8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia’s fightback at the higher end of the market.”
Despite the disappointing second-quarter numbers, investors cheered Nokias outlook. The companys shares were trading 4.65 percent higher at $9.23 by about 11:45 a.m. Eastern.