Nokia shares plunge on profit warning Nokia shares tumbled as much as 19 per cent after the struggling Finnish handset maker warned on Wednesday that profits in its phone division would be worse than expected in the first and second quarters. The company said tough competition had affected net sales in emerging markets and had also led to gross margin declines in its smart device business, another setback for the group which is attempting to muscle in on the lucrative smartphone market. Nokia shares, which have more than halved in the last year, were 16 per cent lower at €3.22 in afternoon Helsinki trading, after closing at €3.82 on Tuesday. "Our disappointing devices and services first-quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our devices and services business continues to be in the midst of transition," said Stephen Elop, chief executive. The company said it was "quickly taking action" to address the problem and would focus on increasing sales of its Lumia handset and lowering the company's cost structure. "We are continuing to increase the clock speed of the company," said Mr Elop. The announcement follows news earlier on Wednesday that there was a software bug in Nokia's new flagship Lumia 900 model, which was launched just three days ago on Sunday. Nokia is counting on this phone to lead its fightback in the US, where it has so far struggled to capitalise on a booming smartphone market dominated by Apple's iPhone and the many manufacturers, including Samsung, that use Google's Android operating system. Nokia said there would be a solution to the problem by April 16 and that everyone who has purchased a Lumia 900 before April 21 will receive a $100 credit to their AT&T bill from Nokia. The Lumia 900 is similar to the Lumia 800 but has a larger screen and 4G connectivity. Nokia has been forced into extensive restructuring since the arrival of Mr Elop as chief executive in 2010, owing to a rapidly declining market share and the lack of a competitive device in the smartphone market.