Nokia lowers Q2 outlook, withdraws annual forecast

"Nokia now expects Devices and Services net sales to be substantially below its previously expected range of 6.1 billion to 6.6 billion euros ($8.6-9.5 billion dollars) for the second quarter 2011," the company said in a statement, citing lower than expected selling prices and volumes.

After issuing the warning, Nokia saw its share price plummet 13.1 percent at 1230 GMT to 5.00 euros a share on a Helsinki stock exchange down just 0.14 percent. Shares in mobile phone giant thus reached a new lowest level since 1998.

Nokia said that the sudden change in second-quarter expectations also negated its predictions for full-year sales.

The company had previously said it expected handset sales to remain at the same level in the third quarter as the second quarter, with a seasonal upswing in the fourth quarter.

"These targets are no longer valid," Nokia said, adding that it would no longer provide annual targets for 2011, and would only give short-term quarterly guidance in its interim reports "when circumstances allow it to do so."

In February, the company announced a strategic shake-up, including phasing out use of its smartphone platform Symbian in favour of a tie-in with the Microsoft Phone platform, and warning that the transition would cause turbulence for Nokia.

"Strategy transitions are difficult. We recognise the need to deliver great mobile products, and therefore we must accelerate the pace of our transition," Nokia chief executive Stephen Elop said in Tuesday's statement.

Copyright AFP (Agence France-Presse), 2011