The world’s No. 1 mobile phone maker Nokia Corp. on Thursday said profits fell 61 percent in the second quarter from the same period a year ago, when the company booked a large gain from a joint venture with Siemens AG.

Finland-based Nokia’s profit was $1.75 billion, or 46 cents per share, down from $4.49 billion, or $1.14 per share, a year earlier.

Sales rose 4 percent to $20.87 billion.

The 2007 second-quarter result included a $2.98 billion gain from the formation of Nokia Siemens Networks, a joint venture with Germany’s Siemens AG.

Excluding special items, Nokia said its profit rose 8 percent to $2.18 billion.

Analysts expected earnings of 56 cents per share on $20.05 billion in revenue, on average, according to Thomson Financial.

The Finnish company said its share of the global market for handsets grew to 40 percent, from 38 percent 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 percent.

“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 Chief Executive 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 dollar, Nokia said.

The average price for a Nokia handset was $117, down from $125 in the first quarter of the year and $143 in the second quarter of 2007.

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 percent in North America and flat in Europe.

___

On the Net:

Company Web site: http://www.nokia.com