Daily Management Review

Nokia Beats Market Expectations For Its Profits In The Third Quarter


Nokia Beats Market Expectations For Its Profits In The Third Quarter
The operating profits for its latest completed quarter as reported by the Finnish telecom equipment maker Nokia managed to comfortably beat analysts estimates on Thursday as the business continued to stage a turnaround driven by the strong performance of its development investments, updates in its strategy, and cost curtailment.,
There was a 2 per cent growth in its net sales for the third quarter at 5.4 billion euros ($6.27 billion) compared to 5.3 billion euros in the same quarter a year ago. This metric was in line with the expectations of analysts.
"The third quarter saw us achieve 2% constant currency net sales growth despite the impact of earlier communicated headwinds in North America for Mobile Networks and global supply chain constraints," Chief Executive Pekka Lundmark said in a statement.
The company is now expecting its comparable operating profit margin for the entire year of 2021 to be more aligned towards the upper end of its targeted range of between 10 per cent and 12 per cent, he added. 
The company also reported that its comparable operating profit for the July-September quarter increased to 633 million euros compared to just 486 million in the same quarter last year. This figure for the latest completed quarter also beat the 488 million euro mean forecast of eleven analysts polled by Refinitiv.
However, the company also issued a warning about its profits for the second half of the current year not being as high as the first half because of potential issues arising from the global semiconductor shortage as well as loss of market share and the company being forced to bring down its prices to compete in the very competitive North American market.
Nokia announced in July that it had won its first-ever contract to set up a 5G mobile network in China even while its market share was lost by Nokia’s Nordic rival Ericsson in China following the decision of Sweden last year to impose a ban on Chinese vendors from participating in the construction of 5G mobile network in the country.