Nokia

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cut its third-quarter revenue forecast amid lower-than-expected sales of network equipment in Europe and Asia, said Chief Financial Officer Olli-Pekka Kallasvuo.

The company also said it will write off $293.2 million in loans to German mobile-phone operator MobilCom and will withdraw further financing commitments to the company.

The midquarter report sent the company's ADRs down 4% to $13.62 in early trading.

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The world's largest handset maker cut its overall sales forecast to $6.9 billion to $7.2 billion (7.1 billion to 7.4 billion euros), from the previously forecast $7 billion to $7.4 billion (7.2 billion to 7.6 billion euros). Sales were $6.87 billion in the same period last year.

Global handset shipment volume across the industry is expected to be around 400 million units, as previously forecast. At the end of the second quarter, the company reduced its estimate from 420 million units.

The company said earnings per share are expected to come in at the high end of a range of 14.63 cents to 16.6 cents, in line with its previous forecast. Nokia posted earnings of 15.6 cents in the same period last year.

Network-systems sales are expected to decline 5% in the third quarter on the year, Nokia said. But phone sales are expected to grow 4% to 9%, driven by a portfolio of new models. Kallasvuo said sales in the handset division are being boosted by subscribers who are upgrading their phones in order to take advantage of new wireless services, including multimedia messaging, which lets users send and receive short animation clips to other phones.

During the company's conference call, one analyst questioned whether recent reductions of discounts on phones offered by carriers could impact sales in coming quarters. Kallasvuo said, "It's not really possible to draw a general conclusion when it comes to subsidies," and pointed out that carriers have an incentive to discount prices on phones, as new models help drive revenue from next-generation services.