
The telecom behemoth suffered a severe setback as its shares plummeted by 8% following the release of its lowest quarterly net sales number since 2015. Numerous causes have been cited for this fall, including an unfavorable comparison with India’s 5G rollout peak from the previous year.
Nokia announced net sales of €5.1 billion for the second quarter of 2024, a significant decrease from the €5.8 billion recorded during the same period in the previous year. Pekka Lundmark, the company’s CEO, emphasized how the strong performance in India the year before affected the present numbers. According to Lundmark, the difficult comparison period from a year ago, when India’s fast 5G deployment peaked and accounted for three-quarters of the reduction, had the most impact.
According to the company’s financial report, net sales in the Network Infrastructure segment decreased by 3% yearly, but the Mobile Networks segment saw a 14% reduction. Nokia has a substantial presence in North America and India, where weaker demand was the main factor contributing to the decline in net sales.
Despite these difficulties, Lundmark was upbeat about what lay ahead. Even if the sales rebound takes longer than predicted, he said that gains should be seen in the upcoming quarters. “The net sales recovery is occurring somewhat later than we previously expected, which impacts our business group net sales assumptions for 2024, even though the dynamic is improving,” he continued.
Nokia’s financial outlook is still cautious; the company has lowered its full-year net sales projection from €23.4 billion to €24.6 billion to between €22.6 billion and €23.2 billion. This updated estimate reflects the continued difficulties in important markets and the demand recovery’s slower pace than anticipated.
Following Nokia’s statement, market experts have expressed a mixture of cautious optimism and worry. Richard Windsor, an analyst at Radio Free Mobile, stated, “Nokia’s recent performance underscores the volatility in the telecommunications sector, particularly in regions undergoing significant infrastructure changes.” “However, the company’s strategic adjustments and focus on technological innovation could pave the way for a stronger recovery in the long term.”
Investors will keenly observe Nokia’s performance in the upcoming quarters, especially its attempts to leverage the expanding demand for 5G technology in other areas. The company’s capacity for innovation and adaptation will be essential to sustaining growth and winning back investor trust as it navigates these challenging times.