NEW YORK (CNN/Money) - How do you say unmitigated disaster in Finnish?

Nokia, the Helsinki-based cell phone manufacturer, reported second-quarter results Thursday that were mostly in line with reduced forecasts. But the company warned that third-quarter sales and earnings would be lower than expected.

And this is starting to become a bad habit for Nokia. Its top rival Motorola used to be known as a "serial warner" due to its knack for failing to meet Wall Street's earnings and sales targets.

Nokia's warning Thursday morning was the company's third since April. Investors punished Nokia (NOK: Research, Estimates) as a result, pushing the stock down nearly 13 percent to $12.40, a new 52-week low. Shares are down more than 26 percent this year.

But Motorola, which will report its second-quarter results on Tuesday, is now clicking, gaining market share and racking up healthy gains in sales and earnings. Its shares are up nearly 20 percent in 2004.

Expect that trend to continue. Several analysts think Nokia is dead money for the remainder of this year.

"Nokia's stock is priced at a level where investors must be thinking that there is more bad news to come," said Albert Lin, an analyst with American Technology Research. "Nokia looks cheap but in a market that's always worried about the near-term, that fixation will mean that Motorola will probably do better."

Nokia, the cell phone market share leader, has stumbled because it failed to meet the demand for clamshell-shaped phones, phones that flip open. They are all the rage now but Nokia, once regarded as the most innovative of cell phone manufacturers, missed the boat.

Fortunately for tech investors, the overall cell phone market still looks pretty healthy. The problem does not appear to be that consumers no longer are interested in buying the latest phones. They just aren't buying as many from Nokia.

To that end, its market share slipped from an estimated 39 percent a year ago to about 31 percent. Although, Nokia reported a decent 11 percent gain in volume from a year ago, its growth is lagging the rest of the industry, which Nokia pegged at about 40 percent.

SonyEricsson, the world's fifth largest cell phone maker, reported Thursday morning that its cell phone shipments in the second quarter increased 55 percent from a year ago. Motorola is expected to report similarly strong volume gains next week.

For this reason, the savvy way for investors to profit from Nokia's woes might be to scoop up the shares of its competitors, which also fell on Thursday.

Ericsson (ERICY: Research, Estimates), which co-owns SonyEricsson with the Japanese tech giant Sony, plunged 6 percent. Germany's Siemens (SI: Research, Estimates), #4 in global cell phone market share, dipped nearly 1.5 percent. And Motorola (MOT: Research, Estimates) was down about 1 percent.

Greg Gorbatenko, an analyst with Marquis Investment Research, said that Motorola's decline, even though relatively small, is particularly puzzling.

"It's ridiculous that Motorola is trading down. Nokia comes out and says industry growth is great but that it didn't get any of it. By deductive reasoning, somebody had to get it," Gorbatenko said. "People are seeing Nokia is taking a bath and are incorrectly thinking that it's an industry problem."

Nokia, to its credit, is fighting back. It finally got some clamshell models on the market in the second quarter and the company indicated that its market share slide appeared to stop in May.

But Nokia has largely been trying to win back market share by cutting prices on older phones. So fears of a price war in the cell phone business may be spooking investors.

Recently in Tech Biz • Netflix's next close-up • The real risk in Indian offshoring • Raining on Apple's parade • Ma Bell needs to get stingy

After all, price cuts severely dented Nokia's cell phone division's profit margins, which dipped from 27.2 percent a year ago to 19.1 percent in this year's second quarter.

But that too might be just a Nokia problem. If anything, Nokia's woes show that cell phone buyers might not be as price sensitive as previously thought.

Rather than show loyalty to Nokia and buy a cheaper phone that's not in vogue, consumers appear to be willing to try other brands. (That's what I did late last year. I had been a fairly loyal Nokia customer but when I was looking to upgrade to a clamshell, Nokia couldn't help me. So I bought a new phone from Korea's LG instead.)

YOUR E-MAIL ALERTS Tech Biz Nokia Wireless Phones By Paul R. La Monica or Create your own Manage alerts | What is this?

"Other companies have been able to fight pricing pressure, which is good," said Ren Zamora, an analyst with Loop Capital Markets. "If all the companies started cutting prices, you don't want to go down that road."

So until Nokia can prove that consumers are interested in its newer, higher priced models, as opposed to merely taking advantage of sales on older ones, analysts will remain worried about the company's outlook.

"We're seeing a stabilization in market share but it's through the process of buying market share as opposed to winning market share," said Ari Bensinger, an equity analyst with Standard & Poor's. "We don't see a profit recovery until 2005. Nokia needs to get some new products."

Analysts quoted in this story do not own shares of the companies mentioned and their firms have no investment banking relationships with the companies.

Sign up to receive the Tech Investor column by e-mail.

Plus, see more tech commentary and get the latest tech news.