Nokia in crisis as profits fall sharply again
Pressure on Nokia boss Olli-Pekka Kallasvuo reached fever pitch yesterday when the embattled phone maker announced a sharp drop in second-quarter profits.
The firm, which makes every third mobile phone sold in the world, has been rocked by
two profit warnings and a management shakeup in the second quarter alone as it struggles
to keep pace with smartphone rivals Apple and Google.
Nokia has already begun to send out headhunters to replace Kallasvuo, who has spent more than half of this life at the company. He may be ousted as early as this month.
Kallasvuo, a 57-year old former company lawyer and chief financial officer who married a veteran Nokia attorney, told CNBC television that talk of his exit was hurting the company and had to stop.
A Nokia spokeswoman declined to comment after the results on whether Kallasvuo still enjoys board support.
Nokia’s underlying second-quarter earnings per share fell 27 per cent from a year ago to €0.11, in line with market expectations.
Nokia warned last month that phone sales and profits in the quarter would be weaker than
earlier forecast, with the Finnish firm forced to slash prices to battle against Apple’s iPhone and smartphones using Google’s software.
Underlying second-quarter earnings per share fell 27 per cent from a year ago to €0.11, in line with market expectations. Operating profit margin at its key cellphone unit dropped to 9.5 per cent in the second quarter and warned it could fall further in the third quarter.
The firm is now resting its hopes on its new N8 phone, its first using its new Symbian
software, which it says will have a user experience superior to that of any smartphone Nokia has created.
Nokia shares have dropped around 20 per cent so far this year, strongly underperforming the technology index, which is up seven per cent.