Nokia shares fall on price cuts
Investors see decision to cut price of top phones as an act of desperation against rivals
By CFOWorld staff | CFO UK | Published 15:25, 16 July 12
Nokia’s decision to cut the price of its lead smartphone caused its shares to tumble on Monday as investors talked with their feet and analysts warned on second quarter results.
Shares in Nokia Oyj fell over 3 percent on Monday as investors saw the decision as an act of desperation in the Finnish company’s battle against rivals.
Analysts also cited caution ahead of Thursday's second-quarter report and short-selling of the stock reached record highs. The results are expected to show a widening loss for the world's second-largest cellphone maker.
Once the world's dominant mobile phone provider, Nokia was late to embrace smartphones, and has lost out to rivals Apple and Samsung in the most profitable part of the market.
Nokia halved the price of the Lumia 900 phone in the US over the weekend to try and lure customers away from its rivals.
Analysts expect Samsung to sell 50 million smartphones in the second quarter, a Reuters poll showed on Monday, compared with Apple selling around 30 million iPhones and Nokia around 10 million smartphones.
Nokia shares were 2.33 percent lower at €1.476 by 1116 GMT, after falling more than 3 percent earlier in the session and still near a 16-year low of €1.434 reached last week.
The proportion of Nokia shares out on loan has risen to 13.2 percent in the last month, Markit data showed, as speculative investors took bearish positions ahead of the report.
Nokia is expected to report a net loss roughly doubling to €706 million euros (£556.3 million) and burn through more than a billion of cash in just three months, according to a Reuters poll of 38 analysts.
In the three months to June, all three major credit ratings agencies cut Nokia bonds to "junk" while the company warned twice on profits and said it planned to cut one in five jobs.
Share:Facebook Twitter Google Plus Stumble Upon Reddit Share This Email this article
There are just 16 female executives in the first five FTSE 100 companies and technology firms fare even worsemore ..
CFOs are in prime position to improve customer satisfaction, CEO of Customer Service Institute saysmore ..
The separate UK listing is expected to take place over the next 12 months, the company said in its half-year results updatemore ..
Murdoch's 21st Century Fox confirmed it made a takeover offer for Time Warner in Junemore ..
It is not enough to assign a contract and then expect the outsourcer to run with it independentlymore ..
Ed Harding offers an insight into the life of an interim CFO and the advantages in driving transformationmore ..