Nokia Profit Plunges 90 Percent in 1st Quarter

Nokia Corp. on Thursday said its profits plummeted 90 percent in the first quarter as demand for mobile phones continued to weaken amid a slump.

The world's top mobile phone maker said net profit was only euro122 million ($161 million) compared to euro1.2 billion in the same period last year.

Sales fell 27 percent to euro9.3 billion ($12.2 billion), from euro12.7 billion in the first quarter of 2008.

Nokia's share price surged almost 8 percent in Helsinki to euro10.92 ($14.38) after the report.

Nokia maintained its previous estimate that mobile device market would shrink by 10 percent this year and held on to its target of boosting market share.

Nokia has fared better than many rivals during the world economic slump. But it, too, has been hit by falling demand. Last month it announced 1,700 layoffs worldwide.

"In what has been an exceptionally tough environment, we continue to invest in a focused manner in consumer Internet services delivered across our broad portfolio of mobile devices," chief executive Olli-Pekka Kallasvuo said. "Combined these solutions will drive our future growth."

Kallasvuo said he was "especially pleased" with the performance of the Nokia5800, a touch-screen music phone that rivals Apple's iPhone.

Nokia's handset sales plunged 33 percent in January through March to euro6.2 billion ($8.17 billion), leaving Nokia with a 37 percent market share, unchanged from the previous quarter but down 2 percentage points from the first quarter of 2008.

The Finnish company said it sold 93 million devices in the period, down 19 percent from 115 million in the year-ago quarter. In the last quarter of 2008 Nokia sold 113 million handsets.