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Nokia says visibility improving after weak Q1

  The world’s top cellphone maker Nokia calmed jittery investors on Thursday by reaffirming its forecast for the handset market and saying visibility was improving, sending its shares higher.

January-March sales and profit fell sharply as the economic downturn sapped demand for new phones, with reported earnings per share sinking to €0.03 from €0.32 and missing he average forecast of €0.06 in a Reuters poll.

The cellphone market is facing its toughest year ever in 2009, with Nokia repeating its forecast for market volumes to fall around 10%.

Nokia shares gained a much as 10% on the result, cheered by the firm holding steady on its outlook after a grim quarter marked by mostly negative news. At 1036 GMT the share was up 8.8% at €11.02.

To cope with slowing demand Nokia has focused on cost cuts in early 2009, slashing jobs across its operations while also halting the use of subcontractors in phone manufacturing.

Nokia Chief Executive Olli-Pekka Kallasvuo said inventories of unsold cellphones had decreased substantially in the quarter. “(This) has also resulted in the demand picture becoming more predictable as we enter the second quarter,” he said.

To cope with slowing demand Nokia has focused on cost cuts in early 2009, slashing jobs across its operations while also halting the use of subcontractors in phone manufacturing. (Reuters)