Nokia Slashes Profit Forecast on Smartphone

After a year into an alliance with Microsoft Corp. to try to win back market share lost to Apple Inc. , Nokia cut its profit forecast for the handset division, as sending the stock as much as 12 percent lower.

The first-quarter operating margin for the devices and services business was probably minus 3 percent based on the non- IFRS accounting standard, Espoo, Finland-based Nokia said in a statement today.

The company had predicted “around breakeven” with a range of 2 percentage points in either direction. Second- quarter figures will be “similar to or below” those for the current quarter, it said, as Bloomberg stated.

“During the first quarter 2012, multiple factors negatively affected Nokia’s devices & services business to a greater extent than previously expected,” Nokia said, citing competition in smart phones, macro-economic environment and demand for its new products.