Investors offloaded shares in Nokia
Nokia shares fell 9.6 percent to 4.298 euros by 0930 GMT, extending their previous day's 18-percent fall. The stock is trading at its lowest level in more than 13 years.
Nokia said on Tuesday that mobile phone sales in the second quarter would be substantially below its previous forecast and abandoned its full-year outlook, blaming difficult conditions in China and Europe.
The company is moving to Microsoft Corp's
Analysts said their main concern was that Nokia, once the biggest player in mobile phones, may not be able to reclaim much market share even after it begins selling new phones based on Microsoft Corp's Windows software.
We would continue to avoid the stock as Symbian smartphone sales are falling off faster than expected and we are skeptical that new Windows Phone models will be able to replace lost profits, said Gleacher & Co analyst Stephen Patel.
The company said tough competition from Apple
After Tuesday's drop, Nokia shares were trading at 10.4 times 12-month estimated forward earnings, compared with Apple's 12.7 times and Microsoft's 9.1 times.
We are concerned that the erosion that the company has suffered in Q2 is just the beginning and that there could be worse to follow, Nomura's Global Technology Specialist Richard Windsor wrote in a note.
Nokia's potential release of a Windows Phone in Q4 is irrelevant, in our view, he added, pointing out that it would be a high-end device likely to ship in low volumes.
Nomura cut its price target to 4.00 euros from 4.75 euros and kept its reduce recommendation.
J.P. Morgan also cut its price target on the shares to 4.25 euros from 5 euros, while Credit Suisse cut its target to 4 euros from 5.5 euros.
We see the earliest possible timing for the beginnings of a turnaround as the launch of new Windows products which we expect at the end of this year, J.P. Morgan analyst Rod Hall said in a note, recommending investors remain underweight on the shares.
Even then there are no guarantees that consumers will want what Nokia is selling, he wrote. (Reporting by Ritsuko Ando in Helsinki and Georgina Prodhan in London; Editing by Louise Heavens and Jane Merriman)