Nokia reports weakest quarterly sales in nine years

18th Jul 2024 10:58

(Sharecast News) - Nokia's stock was under heavy selling pressure on Thursday after the Finnish telecoms group posted its lowest quarterly net sales figure in nearly a decade and reported a big drop in profit as investments in 5G equipment waned.

Net sales in the second quarter were 18% lower than the year before at €4.47bn, its weakest quarterly performance since the end of 2015.

The company blamed "ongoing market weakness" as well as tough comparatives with last year which saw the peak of India's rapid 5G deployment, with India accounting for three quarters of the year-on-year decline.

Headline operating profits were down 8% at €432m, while comparable operating profits sank 32% to €423m as the comparable operating margin dropped 190 basis points to 9.5%.

Nevertheless, Nokia said its full-year 2024 outlook remained unchanged, pointing to a comparable operating profit of between €2.3bn and €2.9bn, compared with €2.38bn in 2023.

While the outlook was still "uncertain", president and chief executive Pekka Lundmark gave reasons for optimism regarding incoming orders.

"I am pleased to confirm that the improving order intake momentum we've talked about for the past couple of quarters has continued in the second quarter across the group and most notably in Network Infrastructure," Lundmark said.

"This trend means our backlog further expanded and we look forward to a meaningful improvement in net sales in the second half."

The stock was down 4% at €3.44 by 1425 in Helsinki, having dropped as much as 8% earlier on.