Nokia and Sony Ericsson watch profits tumble

 

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By Stuart Turton

Posted on 17 Jul 2009 at 11:22

Nokia has reported a sharp fall in sales, but remains optimistic the worst is over.

The world's largest mobile-phone maker revealed that profits tumbled to 380 million euros in its second quarter, down from 1.1 billion euros last year - representing a fall of 66%.

However, the company was putting on a brave face claiming the results were a "solid performance in another tough quarter". This was despite admitting it was unlikely to increase market share this year, a U-turn on earlier predictions.

If investors could take anything positive from the results, it was Nokia's chief executive Olli-Pekka Kallasvuo claiming to see a light at the end of the tunnel: "Competition remains intense, but demand in the overall mobile device market appears to be bottoming out."

Nokia wasn't the only company struggling. Sony Ericsson reported a loss of 213 million euros during the quarter - a slight improvement on its first quarter loss of 293 million euros.

"As expected, the second quarter was challenging and we still believe the remainder of the year will be difficult for Sony Ericsson," the company admits. "Our performance is beginning to improve because of our cost reduction activities."

That's a euphemism for its plan to cull 4,000 jobs.