Nokia's net profit falls 90 percent

From CNET News.com: The company on Thursday reported a 90 percent fall in first-quarter net profits as the global recession took a big bite out of demand for mobile devices.

For the first quarter, which ended March 31, Nokia said that net profits fell to 122 million euros ($161.3 million). A year earlier the company reported net profits of 1.22 billion euros. Analysts had expected the company to report net profits of about 306 million euros.

The company's sales fell to 9.27 billion euros from 12.66 billion euros last year. This was also below analyst expectations, which were counting on sales of around 9.80 billion euros.

Nokia said that it shipped about 93.2 million handsets during the quarter, a decline of 19 percent from a year earlier and down roughly 18 percent compared to the fourth quarter.

"The inventory already in the sales channels decreased substantially during Q1 due to extensive destocking by operators and distributors," Nokia Chief Executive Olli-Pekka Kallasvuo said in a statement. "This adversely impacted our sales volumes in the quarter. However, it has also resulted in the demand picture becoming more predictable as we enter the second quarter."

The company reiterated that it expects sales to fall at least 10 percent this year based on 2008 levels. But much of the decline is expected in the first half of the year. The company said that it expects sales volumes in the second quarter to be flat or slightly up from what it saw in the first quarter.

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