Nokia shares fell sharply yesterday after the company cut its forecast for devices and services sales in the second quarter.
The company warned that the sales for the quarter will likely be “substantially below” the previously forecast €6.1 billion to €6.6 billion. It did not provide updated figures.
Nokia's Helsinki-listed stock slumped 17.53% in Tuesday's trading following the downgrade to the lowest point since the late 1990s. Its NYSE shares fell 14.39% to $7.02.
Nokia blamed the expected decline on a deterioration of operating margins, which are now anticipated to be only around breakeven instead of the previously expected 6% to 9%. Sales and average selling prices have also so far been lower than expected.
The company also struck out its prior targets for the remainder of the year - including an operating margin of between 6% and 9% for the full year - and said it is no longer appropriate to provide annual targets.
CEO Stephen Elop said the company will take immediate action to impact the issues affecting the business.
“We must accelerate the pace of our transition,” he said. “Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter.”
Bloombergcalculated that Nokia's Helsinki shares have now fallen 37% during Elop's eight months at the helm. When Elop took over last year, it was partly due to shareholder dissatisfaction over the declining share price under the tenure of predecessor Olli-Pekka Kallasvuo.