Uche Cecil Izuora
The Finnish telecom giant Nokia said Thursday that its operating profit declined 32 per cent in the second quarter from last year.
Operational profit is a company’s earnings before interest and taxes.
Nokia’s sank from 619 million euros (about $676 million) in the second quarter of 2023 to 423 million euros ($462 million) in the same period this year. Its net sales sank the most they have since 2015 over the same period.
Nokia said India was to blame. That’s because sales of Nokia products in the country peaked in the second quarter of last year, surging a whopping 333 per cent.
So, the near 70 per cent decline in sales there this year wasn’t as scary as it sounds, Nokia chief financial officer Marco Wirén explained in a call to investors. Wirén said there was “softness across most markets” but that sales grew modestly in North America.
The firms Chief Executive Officer (CEO) Pekka Lundmark said in the company’s earnings release that the “market dynamic remains challenging” as mobile network operators “continue to be cautious.”
Nokia shares sank around 6 per cent on the news. The company’s stock price — a modest $3.64 on the New York Stock Exchange is still up more than 10 per cent from three months ago, when it launched a round of share buybacks .
Nokia also said it expects its recent acquisition of Infinera to enhance the profitability of its optical networks business.
“It will enable us to deliver faster innovation for customers and expand our position with webscale and regionally in North America,” Lundmark separately told investors in the call Thursday