June 17, 2024
Nokia shares weaken as profit misses estimate and company warns on customer spending delay

Nokia shares weaken as profit misses estimate and company warns on customer spending delay

Nokia shares fell as much as 4% on Thursday as the telecom equipment maker reported worse-than-forecast profit, guided its sales outlook lower, and said customers are beginning to delay spending.

Nokia NOKIA, -8.66% NOK, -9.09% said its first-quarter profit fell 32% to €289 million ($317 million) while sales rose 10% to €5.86 billion.

Its operating profit of €479 million came in below expectations of €543 million, though sales were a touch ahead of estimates.

Its profit was dragged lower by its technologies division, which houses its patents, as well as €30 million in losses from its venture fund. Analysts at JPMorgan noted Nokia didn’t change its full-year earnings guidance due to technology, which implies it’ll catch up later in the year.

Its sales outlook was lowered to range of €24.6 billion to €26.2 billion, from a previous range of €24.9 billion to €26.5 billion, which it says was the result of changes in the value of the euro.

“We are starting to see some signs of the economic environment impacting customer spending. Given the ongoing need to invest in 5G and fiber, we see this primarily as a question of timing; nevertheless we will maintain our cost discipline to ensure we can successfully navigate this,” said CEO Pekka Lundmark in a statement.

Rival Ericsson ERIC.B, -2.42% ERIC, -1.85% on Tuesday had said that customers in early 5G markets have slowed their deployment pace.

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