Shares in Finnish mobile giant Nokia have crashed to a 13-year low, following an announcement yesterday that it cancelled its financial outlook for the year, fearing poorer than expected performance.
The news sparked a sharp decline in the value of Nokia's shares, with stocks in the company currently trading around 25 per cent down on the price before the announcement.
The pessimistic outlook comes in spite of Nokia's recently inked deal with Microsoft to create handsets for the software company's Windows Phone 7 platform. The controversial deal aims to revive Nokia's fortunes in the smartphone market, where its share has dropped from 44.2 per cent to 27.4 per cent in the last year, according to recent figures from analysts Gartner.
A statement released by the company on Tuesday explained that "multiple factors are negatively impacting Nokia's Devices & Services business to a greater extent than previously expected", and said it was "no longer appropriate to provide annual targets for 2011".
"Nokia now expects its 'Devices & Services' net sales to be substantially below its previously expected range of €6.1bn to €6.6bn for the second quarter 2011," the statement continued. "This update is primarily due to lower than previously expected average selling prices and mobile device volumes."
The company expects its operating margin for the quarter to be "around breakeven", rather than the six to nine per cent previously forecast.