Nokia profits down

Slow handset sales and declining prices contributed to a decrease in Nokia profits

Nokia reported a 61 per cent drop in net income for the second quarter of fiscal year 2008, down from €2.8bn (£2.2bn) to €1.1bn compared with the same quarter in 2007. Sales revenue remained flat at €13.2bn in the same period.

The company blamed the shortfall on restructuring charges associated with the closure of its manufacturing plant in Germany against the abnormally high profits in the second quarter of 2007 due to gains from the formation of Nokia Siemens Networks.

Slow consumer spending on new handsets, declining prices and unfavourable US dollar exchange rates also contributed to the decrease. Nokia's share prices rose slightly on the news.