Nokia has today reported quarterly operating profit below market expectations despite the Finnish telecom equipment maker continuing to benefit from strong demand from phone companies as they roll out 5G.
Third-quarter comparable operating profit rose to €658m from €633m last year, lagging the €690.6m mean forecast of 10 analysts polled by Refinitiv.
While increasing macro and geopolitical uncertainty could have an impact on some customers' spending, Nokia expects growth on a constant currency basis in its markets in 2023, chief executive Pekka Lundmark said.
"Considering our recent success in new 5G deals in regions like India which are expected to ramp up strongly in 2023, we believe we are firmly on a path to outperform the market and to make progress towards achieving our long-term margin targets," he said.
Net sales grew 6% in constant currency in the quarter compared to the same time a year ago to €6.24 billion, beating estimates of €6.06 billion.
But the comparable operating margin fell year-on-year to 10.5% from 11.7% as improving profitability in Mobile Networks and Network Infrastructure was offset by timing effects of contract renewals in Nokia Technologies, the company said.
Rival Ericsson also posted weaker-than-expected core earnings today.
Nokia's share price is down some 15% year-to-date, outperforming Ericsson's 28% drop and in line with European telecoms stocks which on average are down 15% this year.
