Nokia has announced a 40 per cent drop in its net profits to $291 million during the second quarter of 2010, the Wall Street Journal reports.
The Finnish company has struggled hard to maintain its market share in the face of competition from rivals such as Apple and Google.
Nokia had already warned shareholders that it expected sales and profits to fall this quarter due to its failure to compete with new Apple and Google Android-based smartphones, but has said that the result is being better than analysts' predictions.
The company is currently counting on its updated Symbian operating system for mid-ranged Nokia handsets, and the new MeeGo OS for its high-end smartphones, to re-establish the company's position in the smartphone market.
Nokia chief executive Olli-Pekka Kallasvuo has dismissed reports that the company is looking to replace him. Earlier reports cited disappointment that the company had not maintained its market position under Kallasvuo's leadership.