Nokia Beats Profit Expectations As Firm Recovers

Nokia expects a demand recovery in the second half of the year, it said after weak sales of 5G equipment were offset by the Finnish telecom gear maker's tight lid on costs to achieve forecast-beating quarterly operating profit, Supantha Mukherjee and Olivier Sorgho reported for Reuters.

Telecoms equipment suppliers such as Nokia and rival Ericsson are set for a challenging year as mobile operators cut back on purchasing new 5G gear. I Photo: pikkuanna Wikimedia Commons

Telecoms equipment suppliers such as Nokia and rival Ericsson are set for a challenging year as mobile operators cut back on purchasing new 5G gear.

The weaker demand has prompted the likes of Nokia and Swedish rival Ericsson to rein in costs, including through job cuts, to boost profits.

Nokia's comparable earnings before interest and tax fell to 846 million euros ($920.2 million), from 1.15 billion euros in the same quarter a year earlier, but beat the 767.5 million euros expected by analysts in an LSEG poll.

Profit was boosted by stronger gross margins as sales shifted towards software. "Overall we see results as strong in a difficult environment," JP Morgan analysts said in a note.

Nokia's share price rose about 7% in early morning trade, the biggest gainer on the pan-European STOXX 600 index. The company said it expects a 2024 comparable operating profit of between 2.3 billion euros and 2.9 billion euros, compared with LSEG estimates of 2.38 billion euros.

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