On Thursday, Nokia’s headquarters released the company’s third-quarter results, which led to a more than 3% decline in its share price. The Finland-based telecom company reported figures that were largely unsatisfactory to investors, contrasting sharply with the relatively stable performance of the benchmark S&P 500 index.
In its interim report, Nokia disclosed that net sales dropped by 8% year-over-year to just over 4.3 billion euros (approximately $4.7 billion). In contrast, net income rose by 22% to 358 million euros (about $389 million), equating to 0.06 euros per share ($0.07). However, both revenue and net income figures fell short of analyst expectations, which had anticipated 5.21 billion euros ($5.67 billion) in revenue and a net income per share of 0.07 euros ($0.08).
Despite these results, CEO Pekka Lundmark expressed optimism, stating that the company is beginning to improve in many areas, although some sectors still face market challenges. Lundmark highlighted the significant sales growth in Nokia’s network infrastructure business and a substantial order backlog. He also noted continued cash generation, with the company bringing in 621 million euros ($676 million) in free cash flow during the quarter.
Additionally, Lundmark acknowledged that the recovery in net sales is slower than previously anticipated. Nevertheless, the company has seen an increase in gross margins and is actively managing costs. As a result, Nokia has maintained its full-year 2024 guidance, forecasting an operating profit between 2.3 billion euros ($2.5 billion) and 2.9 billion euros ($3.2 billion). Free cash flow is projected to be 30% to 60% of operating profit.
