Company maintains operating profit guidance amidst challenges

  • Nokia cuts full-year sales guidance due to market uncertainty
  • Network operators holding back on investing in new network equipment
  • Sales growth assumptions for business units weaker than expected
  • Operating profit guidance remains intact at mid-point or slightly below
  • High inflation and rising interest rates impacting spending
  • Nokia’s key mobile networks sales down 25% due to India slowdown
  • Network infrastructure sales decline by 11% but growing in North America
  • Operating margin of 8.7% in mobile networks, expected to be between 4%-7% in 2024
  • Group comparable net profit falls 21% to €325 million
  • Sales miss consensus at €4.47 billion
  • Improving cash generation leads to accelerated €600 million buyback program

Nokia has reduced its full-year sales expectations due to ongoing market uncertainty, with telecom operators hesitating to invest in new network equipment. The Finnish telecommunications company now anticipates weaker growth across its business units than previously hoped for. However, the operating profit guidance of €2.3 billion to €2.9 billion remains unchanged. Nokia’s CEO Pekka Lundmark believes the industry is stabilizing and expects a significant acceleration in net sales growth in the second half of the year. High inflation and rising interest rates have led to cautious spending by network operators, but orders have gradually increased over recent quarters, particularly in network infrastructure. Nokia’s key mobile networks sales fell 25% due to a slowdown in India, but its North American unit has returned to growth. The company reported an operating margin of 8.7% in the mobile networks unit and expects it to be between 4%-7% by 2024. Group comparable net profit fell 21% to €325 million, missing consensus at €4.78 billion. Despite this, Nokia plans to accelerate its €600 million buyback program with the aim of completing it by year’s end.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Nokia’s sales guidance, market conditions, and the company’s performance. It includes relevant details about their business units, contracts with AT&T, and financial results. The article also offers insights from the CEO, Pekka Lundmark, on future expectations. However, it could have provided more context on the 2023 market slowdown mentioned.
Noise Level: 7
Noise Justification: The article provides relevant information about Nokia’s adjustment of its full-year sales guidance and discusses the factors affecting its business performance, such as high inflation, rising interest rates, and changes in market trends. However, it lacks a comprehensive analysis or exploration of long-term possibilities and does not offer significant actionable insights for readers.
Public Companies: Nokia (NOKIA), AT&T (not available), Ericsson (not available)
Key People: Pekka Lundmark (Chief Executive)

Track all markets on TradingView

Financial Relevance: Yes
Financial Markets Impacted: Nokia’s stock price and the telecom equipment industry
Financial Rating Justification: The article discusses Nokia cutting its full-year sales guidance, impacting its stock price and the telecom equipment industry. It also mentions the company’s financial performance and future expectations for growth in network infrastructure sales.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article. The text discusses Nokia’s adjustment of its full-year sales guidance due to uncertain market conditions and challenges faced by the telecommunications industry.

Reported publicly: www.wsj.com www.barrons.com