Nokia reports drop in second-quarter net profit

HELSINKI - Nokia, the world’s largest mobile phone maker, Thursday reported a drop in its second-quarter net profit amid “continuing competitive challenges”.

It reported net profit of 104 million euros ($133 million) compared to 287 million euros in the same period last year.

Second-quarter sales increased one percent year-on-year to 10 billion euros and were up five percent compared to the preceding quarter, the Finnish company said.

The results were in line with what analysts had forecast and a Nokia announcement in June that had lowered its outlook.

The group sold 111.1 million units during the quarter, up eight percent year-on-year and three percent compared to the first quarter of 2010.

The tally included 24 million smartphones, a 42-percent increase year-on-year.

Nokia chief executive Olli-Pekka Kallasvuo noted that the global handset market continued to grow “at a healthy pace” despite increased competition, and that Nokia was strong in some of the markets leading the growth.

Nokia continues to renew its smartphone portfolio, he said. The group has faced challenges from other smartphone makers such as Apple.

Nokia estimated that it had 33 percent of the global handset market share in the quarter, slightly down year-on-year and the same as in the first quarter of 2010.

In its outlook, Nokia projected that the global handset market for 2010 will grow by 10 percent compared to 2009, and that its share of the market will remain level.

The average selling price of Nokia handsets in the quarter was 61 euros, down from 62 euros in the first quarter of 2010 and 64 euros year-on-year.

The group’s network business reported a five-percent drop in second-quarter net sales year-on-year to three billion euros.