Nokia Oyj’s earnings topped expectations. Even amid a worse macroeconomic backdrop, as mobile carriers will be more cautious about 5G network spending, the company claims demand is healthy.
Espoo is a Finland-based mobile network operator. It released a statement on Thursday, notifying that the adjusted operating profit climbed 27% to €1.15 billion ($1.3 billion) in the fourth quarter. According to an analyst poll, that is about the same as a typical estimate of €946 million. Adjusted earnings per share were 16 cents higher than expected.
The Company Outperforms Competitors Against All Odds
On Thursday, Nokia’s stock climbed as much as 7.2% in Helsinki to €4.52. Since July, this has been the biggest amount.
5G equipment makers continue to be pressured by rising economic headwinds. Carriers in the United States spent less as revenue shifted to lower-margin areas like India. After some of its key 5G network customers reduced investment, competitor Ericsson AB stated a bigger-than-expected profit reduction last week. According to the firm, an unsteady economic climate has caused uncertainty.
It was clear that the supply chain had broken down. Semiconductors, in particular, are no longer a restriction. The situation has essentially returned to normal. Unusually long lead times are something that has not yet normalized. It directly affects Nokia’s net working capital.
On a Lucky Footing, Nokia Earlier Announced a Samsung Partnership
Nokia and Samsung Electronics Co. signed a multi-year cross-license patent agreement earlier this week. The agreement allows the handset manufacturer to utilize Nokia technologies in exchange for royalties. After the previous intellectual property agreement between the companies expired, a new one was formed. Nokia announced on Thursday that a long-term licensee exercised an option to extend its licensing into perpetuity at the end of the year.
This year, Nokia expects an 11.5% to 14% profit margin. In comparison, in 2022, the firm had a 12.5% profit margin. The company added that sales should reach €26.5 billion this year. According to analysts at Bloomberg, net sales will probably average €25.4 billion.
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