The economic downturn has hit demand for mobile phones
Nokia, the world's largest mobile phone maker, has reported a 90% fall in profits for the first quarter of 2009.
The company said net profits sank to 122m euros ($160m; £108m) in the quarter, down from 1.2bn euros in the same period a year ago.
The main reason for the slump was a dramatic fall in sales, which were down by almost a third.
Nokia is implementing a cost-cutting drive during the economic downturn and announced 1,700 job cuts last month.
Sales were down by 27% to 9.28bn euros in the quarter from 12.7bn euros a year ago, Nokia said.
This included the proceeds from the sale of 93 million phones.
"The macro [economic] environment is causing many people to trade down and purchase lower priced handsets," Nokia boss Olli-Pekka Kallasvuo said.
Financial analysts said the results were not as bad as some had feared and Nokia's share price rose almost 9%.
"Although their performance was bad, it wasn't as bad as expected," said Neil Mawston at Strategy Analytics.
"Everyone talked Nokia down, so there was general relief that things weren't that bad after all," he added.
Nokia's share of the global handset market was 37%, down from 39% in the same quarter a year ago, but stable from the fourth quarter.
The company has come under increased pressure from smart-phones such as the Blackberry and Apple's iPhone.
In fact, Nokia has been criticised for being slow in developing more advanced phones.
"Clearly we are just getting started," said Mr Kallavuso, before saying that Nokia aimed to gain a 20% market share in touch-screen handsets. He did not, however, give a timeframe to achieve this goal.
Looking forward, the company said the outlook for the mobile phone market was improving.
"It is too early to say that end-consumer demand has hit the bottom," said Mr Kallavuso.
"But we believe the market is no longer falling in an uncontrolled manner."
He did, however, predict that the global mobile phone market would contract by 10% in 2009.