Nokia outlook disappoints as Q3 sales fall
By Benjamin Chiou
Date: Thursday 17 Oct 2024
(Sharecast News) - Shares in Nokia fell on Thursday after the Finnish telecoms giant disappointed with earnings guidance for the full year amid "ongoing market weakness".
The company said that third-quarter net sales declined 7% in constant currency to €4.33bn, as growth in Network Infrastructure and Nokia Technologies was offset by declines in the Mobile Networks arm, mainly due to conditions in India and a divestment in Cloud and Network Services.
Nevertheless, the company reported a 5-percentage point gross margin improvement to 45.2%, helping operating profit to rise 4% to €246m for the third quarter.
"As I reflect on our performance in the third quarter, I am optimistic we are now turning the corner in many parts of our business, even if some continue to experience market weakness," said president and chief executive Pekka Lundmark.
Looking ahead, Nokia said it expects to hit the bottom half its guidance range for full-year operating profit of €2.3bn-2.9bn, after previous predicting hitting the mid-point.
"The net sales recovery is happening slower than we expected previously, however, this is being partially offset by an improving gross margin and quick action on cost," Lundmark said.
He predicted a "significant acceleration" in growth in the fourth quarter in Network Infrastructure, and cited a number of important deals secured in the struggling Mobile Networks arm.
The stock was down 4.3% at €3.87 by 1446 in Helsinki.
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