A "Tough" Quarter? I'll Say…

Reporting second-quarter earnings today, Nokia CEO Olli-Pekka Kallasvuo said that the worst may be over. He had better hope so, because the world’s largest handset maker is clearly having a tough time of it. Nokia posted a gruesome 66 percent drop in profit in what the company generously described as a “tough” second quarter, dragged down by sales that fell 25 percent to 9.91 billion euros.

Nokia (NOK) shipped 103.2 million units during the quarter, down about 15 percent year-over-year. Worse, increased competition in the smart-phone market from the likes of Apple (AAPL) and RIM (RIMM) forced the company to reduce forecasts for market share and profitability. Nokia had expected to increase market share in the second half of the year, but now it expects it to remain flat. And the company expects handset shipments for 2009 to be around 10 percent lower than in 2008.

“Nokia put in a solid performance in what was another tough quarter,” Kallasvuo said. “Competition remains intense, but demand in the overall mobile device market appears to be bottoming out.” Good news, because its search for the bottom has been having a calamitous effect on Nokia. Shares in the company are down more than 12 percent at $13.70 in early trading.