Carphone Warehouse, Europe's largest mobile phone retailer, has said this year's underlying earnings will undershoot market forecasts by up to 10% because of tough continental European markets.
The company said its like-for-like gross margin fell 6% in the third quarter to the end of December, while like-for-like revenues dropped 9%.
Gross margin in the UK rose 2%, but revenues fell 5%, while in continental Europe both figures fell by 16%.
The declines came against a backdrop of a steeply dropping overall market for mobile phones, which Carphone said was down by an estimated 40% across Europe.
Chief Executive Charles Dunstone said the overall market for handsets would be tough for the next six months until the next generation of high-speed mobile phones started to hit the shelves.
On its troubles in continental Europe, Dunstone said Germany required the most urgent attention while Holland and Belgium were simply stuck in a bad patch.
Customers signed up to the more lucrative subscription connections, as opposed to pre-paid customers, increased to 43% of the total in the 13 weeks to December from 37.5% a year earlier. But third quarter connections fell 6% to 1.216 million.
