Nokia forecasts contracting profit margins

Nokia predicted shrinking profit margins for its network-equipment business, signalling the company is ready to sacrifice earnings to revive sales after handing its mobile-phone division to Microsoft. The stock plunged.

Operating profit at the network unit, excluding some costs, will drop to 9 per cent of sales this quarter from 11.2 per cent during the previous three months, Nokia said.

Sami Sarkamies, an analyst at Nordea Bank in Helsinki, had estimated 7.6 per cent. The forecast suggests the company, through its Nokia Solutions and Networks unit, is going more aggressively after Ericsson and Alcatel-Lucent to win orders to build networks for wireless carriers. By focusing on base stations and antennas, Nokia is betting on a business that's facing rivalry from China's Huawei Technologies. – (Bloomberg)