NEW YORK (AP) — Shares of Nokia Corp. tumbled in premarket trading Wednesday after the Finnish mobile phone maker warned that fierce competition has driven its second-quarter sales and margins well below Wall Street expectations.
Share prices neared 52-week lows Tuesday, with a raft of industry analysts adjusting estimates for the company going forward. Before the market opened, shares had fallen below that range.
On Tuesday, Nokia said that second-quarter net sales in its key devices and services unit will be "substantially" lower than its earlier forecast of $8.8 billion to $9.5 billion. Operating margins will be well below its forecast of 6 percent to 9 percent, the company said.
Nokia withdrew all 2011 financial targets.
The company has struggled to remain the world's No. 1 cell phone maker as competitors chip away its hold both high-end and the low end handset markets. On the top end are Apple Inc.'s iPhone, Android phones and the BlackBerry. But the company is also facing competition in China and other emerging markets.
"The reason for the shortfall was price competition in Europe and China, a mix shift to more low-end Nokia phones, and Nokia's pricing tactics to remain competitive," said Rodman & Renshaw analyst Blaine Carroll.
Gleacher & Co. analyst Stephen Patel said he would "continue to avoid the stock as Symbian smartphone sales are falling off faster than expected and we are skeptical that new Windows Phone models will be able to replace lost profits."
Patel, who has a "Neutral" rating on Nokia's shares, said low-cost Android smart phones are taking a toll on sales of Nokia's Symbian smart phones.
Nokia's U.S.-traded shares fell 63 cents, or 9 percent, to $6.39 in premarket trading. The stock had closed at $7.02 on Tuesday, already flirting with its 52-week low of $6.79.
