'Sales in the third quarter are expected to be flat or slightly down year-on-year, largely due to a major depreciation of the dollar'

Nokia, the world's top–ranking mobile phone maker, has reported a fall in profits and warned that the weaker dollar could send sales lower.

The Finnish company unveiled second-quarter earnings at 0.14 euros per share, compared with 0.19 euros per share a year before.

While the data was in line with analysts' forecasts, investors took fright at the company's downbeat outlook.

"Sales of Nokia mobile phones in the third quarter are expected to be flat or slightly down year-on-year, largely due to a major depreciation of the U.S. dollar compared with the same period in 2002," the company said.

Nokia shares slid 6.7 per cent to 14.69 euros after the results were released.