US law firm Milberg Weiss Bershad Hynes & Lerach LLP said it is taking Nokia to court in New York as part of a class action suit over the company’s profit warning yesterday. In previous guidance, Nokia had said that sales of mobile phones would be up 3 -7pc. Instead, yesterday the company warned that sales would be down 2pc on the year to €6.6bn.
Yesterday, Nokia issued a profit warning claiming that the company had failed to capitalise on opportunities in the mid range of the mobile market due to poor supply of in-demand devices, losing out to manufacturers with competing devices. As volume sales in the first quarter grew 25pc across the industry, Nokia’s volumes grew only 19pc.
Milberg Weiss Bershad Hynes & Lerach LLP is taking the class action suit against Nokia CEO and chairman Jorma Ollila, chief financial officer Richard Simonson, chief strategy officer Matti Alahuhta and president Pekka Ala-Pietila in the US District Court for the Southern District of New York.
The law firm alleges that during the class action period, Nokia had forecast sales growth of 3 – 7pc, that it expected market growth to continue, and that it had a strong position in the market for mobile phones.
Instead Nokia ran into supply problems of mid range phones and lost out on significant customer demand for the devices, and practically gave market share to competitors.
By John Kennedy