HELSINKI, Finland - World No. 1 mobile phone maker Nokia Corp. has reported its second quarter earnings were down 61 per cent from the year-ago quarter when it booked a large one-time gain.

Nokia's net profit was 1.10 billion euros (US$1.75 billion), down from 2.82 billion euros in the same period of 2007.

Sales rose four per cent to 13.2 billion euros (US$21 billion).

The second-quarter result last year included a 1.88-billion-euro gain from the formation of Nokia Siemens Networks, a joint venture with Germany's Siemens AG.

Excluding special items, Nokia said its profit rose eight per cent to 1.37 billion euros.

The Finnish company said its share of the global market for handsets grew to 40 per cent, from 38 per cent in the second quarter of 2007.

It also upgraded its forecast for the global handset market, saying mobile device volumes could grow more than its previous estimate of 10 per cent.

"Looking at the rest of the year, we are optimistic and have had good feedback about the broad range of new products we expect to sell in our device business," Nokia CEO Olli-Pekka Kallasvuo said in a statement.

However, the closely watched average selling price of Nokia phones continued to fall because of higher volumes of cheaper phones sold in emerging markets and a negative impact of the weak U.S. dollar, Nokia said.

The average price for a Nokia handset was 74 euros (US$118), down from 90 euros a year earlier.

In terms of volume, company saw the biggest sales growth in Asia, Latin America, the Middle East and Africa. Sales of Nokia phones were up 10 per cent in North America and flat in Europe.

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