Nokia plans to raise full-year outlook, cites strong quarter
Under the management of Pekka Lundmark, Nokia has been regaining lost ground by making changes in its operating model, cutting costs, laying off thousands of employees, and forging new partnerships with technology and telecom companies.
Finland's Nokia said on Tuesday it planned to raise its full-year outlook as business picked up pace in the second quarter, sending the telecom equipment maker's shares up more than 6%. The company, which will provide the new outlook on July 29 while reporting second-quarter results, had earlier projected 2021 net sales of 20.6 billion to 21.8 billion euros ($24.4-$25.85 billion). Nokia had been struggling against Nordic rival Ericsson as product missteps in the early stages of 5G hampered growth and led to changes in its top management.
But under the management of Pekka Lundmark, Nokia has been regaining lost ground by making changes in its operating model, cutting costs, laying off thousands of employees, and forging new partnerships with technology and telecom companies. "Our first-half performance has shown evidence of this in good cost control and also benefited from strength in a number of our end markets," CEO Lundmark said in a statement. A spokeswoman declined to give further details.
Nokia, which in April posted better-than-expected quarterly results, had also forecast an operating margin of between 7% and 10%.
"The market is already close to the top of the guidance in both revenue and margin," said OP analyst Kimmo Stenvall. "Nokia has just hosted a capital markets day and issued long-term targets/guidance and now had two very strong quarters."
The company also got a boost as the retreat of Huawei from several European markets gave it access to newer markets and a tussle between the Swedish government and Huawei will likely see Nokia getting more 5G business in China later this year.
($1 = 0.8433 euros)