The world leader in the manufacture of mobile phones, Nokia, reported a quarterly net loss which was far worse than expected today.
The Finnish company had issued a profit warning last week.
But the net loss of €929m in the first quarter of the year was far beyond the loss of €554m broadly expected by analysts.
Sales fell by 30% on a 12-month comparison to €7.354 billion - in line with analysts' expectations.
"We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly'', Nokia's chief executive Stephen Elop said.
"Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges," he added.
The Finnish company is undergoing a major restructuring, phasing out its Symbian line of smartphones in favour of a partnership with Microsoft that has produced a first line of Lumia smartphones.
Nokia is depending heavily on the new phones to help maintain its ranking as the world's biggest maker of mobile phones as it operates in a rapidly changing landscape with RiM's Blackberry, Apple's iPhone and handsets running Google's Android platform take growing bites out of its market share.
Nokia posted an operating loss of €1.34 billion over the period, almost double the loss of €731m expected by analysts and said smartphone sales fell by 42% in the quarter.
On Monday, the international ratings agency Moody's downgraded its ratings for Nokia owing to poor prospects for future sales. The agency also maintained a a negative outlook on senior debt owed by Nokia.
