Shares in telecoms giant Nokia slid 8% on Tuesday after it said sales would be weak in the first three months of this year.
Firms such as Nokia have been dogged by poor sales of phone networks as mobile operators have reduced spending on new networks to try to cut their debts.
The company warned that its Nokia Networks division would report a "substantial" loss in underlying profits for the three months to 31 March.
Nokia's warning also knocked shares in other telecoms firms including Alcatel and Ericsson.
Growth in mobile phone sales was also likely to be sluggish, Nokia said.
It is the market leader, making more than one third of all the mobile phones sold around the world.
It forecast mobile handset sales were likely to be at the lower end of its earlier forecast that sales would grow between nought and 9%.
Nokia said overall group sales for the three months to 31 March would drop slightly compared with a year-earlier.
Last year it reported sales of 7.01bn euros ($7.7bn; £4.8bn) in the first three months.
Nokia, whose Network division employs about 18,000 people worldwide, has cut about 1,000 jobs in its struggling network operations since mid-2002.
It said in January that global sales of telecoms network equipment would be about 10% lower in 2003 than last year, which was a tough one for the industry.
Network equipment sales slumped 20% in 2002.
Now Nokia is predicting first quarter network sales will be 20% lower than a year-ago.
Nokia's shares dropped 8% in morning trade but later recovered to trade down 4% by midday in Helsinki.