Nokia Oyj's earnings fell less than expected in the first quarter and the company signed a final agreement to start using Microsoft Corp software, sending its shares 3 percent higher. But gains were capped by the company's forecast for profits to fall in coming quarters, due in part to Japan's earthquake which hit component supplies across the technology sector.
Underlying earnings per share fell to 0.13 euros in the three months through March from 0.14 a year earlier, beating analysts' average forecast for 0.10. Nokia's market share fell to 29 percent from 33 percent as nimbler Asian rivals ate into its dominant position in cheaper phones and it continued to lose out in more expensive smartphones to Apple Inc and others.
While Nokia's position slipped in the quarter, Apple reported record sales, overtaking the Finnish firm as the largest cellphone maker by revenue, research firm Strategy Analytics said on Thursday. To turn around its smartphone fortunes, Nokia's new Chief Executive Stephen Elop in February unveiled a deal to start using Microsoft software instead of its own Symbian platform.
Uncertainty over the Microsoft deal, including how much cost cuts it would yield, has helped drive Nokia shares down around 30 percent since the deal was unveiled. Nokia said the deal enables it to cut annual costs by around 1 billion euros ($1.5 billion). Part of the savings will come from job cuts, talks on which will start next week.
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