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Nokia ( NOK), the world's largest maker of mobile phones, reported second-quarter operating profit fell 71% to 427 million euros ($600.8 million) from 1.47 billion euros a year earlier.

Sales fell almost 25% to 9.9 billion euros in the second quarter.

Excluding certain items, operating profit for the handset maker declined 62% to 775 million euros.

Net profit fell 66% to 380 million euros, down from 1.1 billion euros in the same period a year earlier.

Nokia said it increased its share of the global mobile device market sequentially to an estimated 38%; its smartphone market share rose to an 41%.

In a statement Thursday, Nokia said it expects mobile device volumes industrywide in the third quarter to be about the same or up slightly sequentially.

Nokia expects its third-quarter share of the mobile devices market to be flat sequentially, and its 2009 market share to be flat vs. 2008, an update to its earlier target that it would increase market share this year.
Smart Phones

Nokia shares were down 12.6% to $13.70 in morning trading Thursday as the company warned that its operating margins would continue to be weak amid tough price competition in mobile phone sales.

The No. 1 phone maker also said it expected some delays and shortages in the third-quarter launch of new smartphones due to supply constraints. The slip-up comes at a sensitive time for Nokia, which had hoped to stem its market share loss in the crucial smartphone market to rivals like Apple ( AAPL) and Research In Motion ( RIMM).
Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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