Nokia (NYSE:NOK) stock price falls 7% The Finnish telecommunications company lowered its sales growth forecast for its business units in early trade on Thursday amid continued market weakness.
The company reported an 18% annual drop in second-quarter sales due to weak 5G telecom demand Devices. The most significant impact was the challenging year-ago period, when 5G deployment peaked in India, while three-quarters of the decline came from Asian countries. By market segment, on a constant currency basis, network infrastructure sales were down 11% from the same period last year, while mobile network sales were down 24% from the same period last year.
Comparable operating profit also fell 32% from the same period last year to 423 million euros from 619 million euros in the same period last year, and the comparable profit margin fell 190 basis points to 9.5%, mainly due to lower net sales coverage of operating expenses.
Outlook for 2024: The company lowered its sales growth forecast for each business unit this year as net sales will recover later than previously expected.
Nokia (NOK) now expects network infrastructure net sales to be -2% to +3% (previously +2% to +8%); mobile networks -19% to -14% (previously -15% to +8%) -10%), cloud and network services -5% to +0% (previously -2% to +3%).
Additionally, the company said it is currently on track to achieve comparable operating profit guidance of €2.3B to €2.9B at or just below the midpoint, and towards the high end of our free cash flow conversion guidance of 30% to €2.9B. 60%.
“We believe the industry is stabilizing and given the order volumes in recent quarters, we expect Net sales growth accelerated significantly in second half”, said CEO Pekka Lundmark. The company maintained its full-year outlook for 2024 unchanged based on cost-saving measures and continued improvement in order intake trends, especially in the network infrastructure area.
