September 25, 2022
Nokia makes surprising second quarter gains as Pekka Lundmark takes over as CEO

Finnish telecoms network equipment maker Nokia reported an unexpected increase in its second-quarter underlying profit on Friday despite the COVID-19 crisis, while its new chief executive, Pekka Lundmark, took charge later this week.

Lagging behind its rivals China’s Huawei and Sweden’s Ericsson in 5G network sales, Nokia said its April-June underlying earnings rose to EUR 0.06 per share from a gain of EUR 0.05 a year ago, in a Refinitiv poll. Outweighed the consensus of 0.03.

Nokia, which warned of a weak second quarter due to the virus, upgrade your forecast The underlying earnings per share for 2020 ranged between EUR 0.2 and EUR 0.3 from EUR 0.18 to EUR 0.28.

Its more profitable Nordic peer Ericsson reported increased 5G network sales and software revenue two weeks ago, and also maintained its financial targets for 2020 and 2022.

However, according to Refinitiv data, Nokia’s quarterly revenue fell 11 percent to 5.09 billion euros (about Rs 45,071 crore), which is not the consensus figure of 5.28 billion euros (about Rs 46,755 crore).

Its outgoing chief executive officer Rajeev Suri said in a statement that there was a Nokia-level revenue decline in the quarter, much of it as a result of COVID-19, as well as a sharp decline in China.

The company estimated that COVID-19 impacted net sales by around EUR 500 million (about Rs 4,428 crore) in the first half of the year.

“We expect that most of the sales missed in the quarter due to COVID-19 will be transferred to future periods,” Suri said.

Suri, who steps down after more than a decade of Nokia and Nokia Siemens Networks, leaves the company to his successor Pekka Lundmark with weak profitability in a highly competitive market situation.

The leadership change at Nokia comes as unrest rages in European telecommunications markets, with increasing pressure from operators by some governments to exclude or limit the use of 5G equipment from China’s Huawei Technologies.

Lundmark will work closely with new president Sari Baldouf, who takes office on Saturday.

© Thomson Reuters 2020

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