Nokia earnings beat expectations, but challenges await

From CNET News.com: Though its first-quarter profits were down, Nokia managed to beat expectations, but the company is looking at a bumpy road in the current quarter.

Earnings for the quarter ended March 31 fell to 344 million euros ($502 million) from 349 million euros in the prior year's quarter. Sales climbed 9 percent to 10.4 billion euros from 9.52 billion euros a year ago. Both results managed to exceed the forecasts of analysts, who were calling for earnings of 287 million euros and sales of 10.11 billion euros, according to the Wall Street Journal (subscription required).

Sales for the company's Devices and Service unit showed a 6 percent gain to 7.1 billion euros. For the quarter, Nokia shipped a total of 108.5 million handsets, a 1 percent gain from the prior year but a 12 percent drop from the fourth quarter.

The company also continues to shed market share across the world. Its slice of the overall mobile phone market fell to 29 percent in the first quarter, down from 33 percent a year ago. Nokia's first-quarter share of the smartphone market dropped to 26 percent, compared with 41 percent in the prior year.

Nokia has cautioned that the current quarter is likely to prove challenging. The company is forecasting second-quarter sales for its Devices & Services unit to be between 6.1 billion and 6.6 billion euros. It also acknowledged that supply chain problems stemming from the Japanese earthquake will affect its mobile device volume through the second quarter and into the third.

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