Nokia’s recent report from its corporate headquarters in Finland had a negative impact on its stock price, which declined by more than 3% on Thursday. The telecommunications company released its third-quarter financial results, which disappointed investors, contrasting sharply with the relatively stable performance of the S&P 500 index.
In the company’s interim third-quarter report, Nokia disclosed an 8% decrease in net sales, amounting to slightly over 4.3 billion euros ($4.7 billion) compared to the previous year. However, net income rose by 22% over the same period, reaching 358 million euros ($389 million), which is equivalent to 0.06 euros per share ($0.07).
These figures fell short of the expectations set by analysts, who had projected net sales of 5.21 billion euros ($5.67 billion) and net earnings of 0.07 euros ($0.08) per share. Despite these results, CEO Pekka Lundmark expressed optimism, suggesting that the company is improving in several areas, even though certain sectors still face market challenges.
Lundmark highlighted that Nokia’s network infrastructure business showed significant sales growth during the quarter, backed by an increasing order backlog. Additionally, the company managed to generate 621 million euros ($676 million) in free cash flow during this timeframe.
While acknowledging that the recovery in net sales is progressing more slowly than anticipated, Lundmark noted that Nokia is benefitting from an improving gross margin and a strong focus on cost management.
Despite these challenges, Nokia retained its full-year 2024 guidance, forecasting an operating profit of between 2.3 billion euros ($2.5 billion) and 2.9 billion euros ($3.2 billion). Free cash flow is expected to be between 30% and 60% of the operating profit.
