Shares in Finnish handset maker Nokia slumped 15 per cent as the group warned that tough competition in emerging markets had dragged down first-quarter handset sales, leading to a squeeze in profit margins.
Nokia said operating margins in the first quarter were "approximately negative 3 per cent", compared with the previously expected range of "around break-even, ranging either above or below by about 2 percentage points". Moreover, margins are not expected to improve in the second quarter.
Chief executive Stephen Elop said the disappointing performance illustrated that the devices and services business continued to be "in the midst of transition". Nokia's management is working to slash the cost base, and drive sales of the Lumia premium smartphone. However, this warning comes just days after news emerged of a software bug on its newly launched Lumia 900.
