Nokia's shares tumble as its core networks business posts weaker profit and, as Sara Hemrajani reports, investors are wary of the Finnish telecoms' possible acquisition of rival Alcatel-Lucent.
Another knock for Nokia. The Finnish telecoms giant has disappointed with its latest numbers. Although the company swung to a first quarter profit of 177 million euros following a loss last year, its core business is struggling. Nokia's mainstay networks division saw its income drop nearly two-thirds due to lower software sales, high costs and what executives call "challenging" market conditions. The announcement came as a surprise to investors, who sent Nokia's shares tumbling as much as 12 percent at the open. That's wiped out the gains made since September. Nokia, which sold its handset unit to Microsoft, is now pushing ahead with a planned takeover of Alcatel-Lucent. Its boss says the deal will boost Nokia's scale and lead to cost savings. But some shareholders are wary of the terms of the acquisition of the smaller French rival. IG market analyst Alastair McCaig. SOUNDBITE: IG market analyst, Alastair McCaig, saying (English): "This is far from a straightforward process. In fact, these companies effectively straddling maybe as many as four different countries in regards to the historical backgrounds of these businesses. So the integration of these two companies together will again not necessarily be a straightforward process. And I think that - as much as the disappointing underlying figures Nokia have posted - will be keeping investors' focus in the quarter ahead." Should Nokia get the green light, the Alcatel takeover would close in the first half of 2016.