HELSINKI, FINLAND: Hit by the global financial recession, Nokia, the world's top cellphone maker, reported on Thursday a sharp yearly decline in its second-quarter net profit and also cut its forecast for the second half profitability and 2009 market share, sending its shares sharply lower.

Nokia's net profit before tax was EUR380 million for the quarter ending June 30, down 66 per cent from EUR1.10 billion a year earlier. However, this is ahead of analysts' expectations for EUR316 million.

Earnings per share came down from EUR 0.29 a year earlier to EUR0.10.

Nokia, which is facing tough competition from the likes of Apple, Samsung and RIM, scaled back its second-half underlying operating profit margin forecast for its key phone unit to the first-half level of 11.3 percent, from 13-19 per cent previously.

Nokia also cut its forecast for 2009 market share at its phone business, seeing it now on a par with last year, compared with an earlier forecast for a rise.

Following the results, Nokia shares fell fell more than 8 per cent to 10.18 euros, compared with a 2.8 per cent lower DJ Stoxx technology index, said a Reuters report.

Despite tough competition, Nokia said its market share marginally increased to from 37 per cent in the previous quarter to 38 per cent this quarter., while its average selling price was down at EUR62 from EUR65.

It forecast that its market share in mobile devices will be flat in 2009 compared with 2008.

"Competition remains intense, but demand in the overall mobile device market appears to be bottoming out," chief executive Olli-Pekka Kallasvuo said.

The handset industry this year is facing its worst downturn ever, and market No 5 Sony Ericsson reported earlier on Thursday a deep loss for April-June.