Nokia shares fall after weak quarterly sales

Earlier today, Nokia He said Comparative net operating profit fell to 423 million euros ($462 million) in the second quarter, down by about a third compared to 619 million euros recorded in the same period last year.

Citing “continued market weakness,” the company said net sales also fell 18% to €4.47 billion — the lowest level since the fourth quarter of 2015, according to LSEG data.

“The most significant impact was the difficult comparison period a year ago which saw rapid 5G deployment peak in India with India accounting for three-quarters of the decline.” Pekka Lundmark, Nokia’s CEO, said in the earnings statement:

He warned that the landscape also remains “challenging as operators continue to exercise caution” in the mobile network sector.

However, Nokia expects a “stable” industry environment and “a significant acceleration in net sales growth in the second half” of the year, based on the order volume seen in the last quarter.

“While the dynamics are improving, the net sales recovery is occurring somewhat later than we previously expected, impacting our 2024 net sales assumptions for the business group,” Lundmark said. “Despite this, we remain on track to deliver on our full-year outlook supported by our rapid cost actions.”

The company continues to target performance at or slightly below the midpoint of its full-year comparable operating profit forecast of between €2.3 billion and €2.9 billion.

Nokia suffered a major blow when it lost a major contract in North America late last year, when US telecom giant AT&T chose Ericsson as a supplier to build a network that would use only its so-called ORAN technology.

The Finnish company and its Swedish rival Ericsson have embarked on aggressive cost-cutting programs amid an industry-wide battle against a slowing economy and infrastructure spending cuts by mobile operators. In October, Nokia announced it would cut up to 14,000 jobs after third-quarter profits fell, with the aim of reducing its overall costs by between €800 million and €1.2 billion by 2026.

The company said on Thursday it had made “significant progress” in its cost-cutting programme and had taken measures to cut costs by €400 million so far.

— CNBC’s Arjun Kharpal contributed to this report.