Nokia, one of the world\u2019s largest mobile network equipment manufacturers, witnessed an 8.5% surge in its shares after unveiling a two-year share buyback program worth 600 million euros ($653 million) this quarter. The announcement came in conjunction with the company reporting a substantial decline in profit for the year 2023.<\/p>\n
In the fourth quarter, Nokia posted net sales of 5.7 billion euros, marking a 23% year-on-year decrease. Comparable operating profit also fell by 27% year-on-year to 846 million euros. The challenging environment of 2023, influenced by macroeconomic factors and high interest rates, led to shifts in customer behavior, particularly in the telecommunications sector.<\/p>\n
Nokia CEO Pekka Lundmark acknowledged the impact of a \u201cmeaningful shift\u201d in customer behavior and the challenges faced by the industry in 2023. The term \u201cinventory digestion\u201d was used to describe how customers, including telecommunications networks, utilized existing gear instead of making new equipment purchases.<\/p>\n
Despite the positive market response to the share buyback program, Lundmark cautioned that the challenging environment experienced in 2023 is expected to persist into 2024. Nokia\u2019s forecast for comparable operating profit in 2024 ranges between 2.3 billion euros and 2.9 billion euros. Analysts\u2019 estimates, as per LSEG consensus, hover around 2.4 billion euros.<\/p>\n
Nokia\u2019s largest revenue division, Mobile Networks, saw a 17% year-on-year sales decline to 2.5 billion euros in the fourth quarter. Lundmark attributed the top-line challenges in 2024 for Mobile Networks to a normalized pace of investment in India and the impact of AT&T\u2019s decision.<\/p>\n
A setback for Nokia occurred in December when AT&T chose Nokia\u2019s rival, Ericsson, to build a new type of 5G network in the U.S. Nokia\u2019s shares have fallen approximately 25% in the past year as a consequence. Lundmark expressed disappointment over the development, emphasizing that it does not reflect Nokia\u2019s technological competitiveness.<\/p>\n
As part of adjustments to market conditions, Nokia lowered its comparable operating margin target to be achieved by 2026 from at least 14% to at least 13%. Despite this adjustment, Nokia remains optimistic about achieving the at least 14% comparable operating margin target, considering the current market conditions in Mobile Networks.<\/p>\n
Nokia\u2019s announcement and share buyback program come amidst a broader industry trend, with rival Ericsson also reporting a fall in sales and operating profit for the fourth quarter and signaling a challenging outlook for 2024. The mobile network industry is grappling with reduced spending and slowing investments in regions such as India.<\/p>\n","protected":false},"excerpt":{"rendered":"
Mobile Network Giant Initiates Share Buyback Program Amidst Profit Plunge and Forecasted Industry Challenges<\/p>\n","protected":false},"author":331,"featured_media":28010,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[3199,9293,9292,2770],"class_list":["post-28603","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tech","tag-ceo","tag-mobile-phones","tag-nokia","tag-technology"],"reading_time":"2 min read","_links":{"self":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/28603","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/users\/331"}],"replies":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/comments?post=28603"}],"version-history":[{"count":0,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/posts\/28603\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media\/28010"}],"wp:attachment":[{"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/media?parent=28603"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/categories?post=28603"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.businessupturn.com\/usa\/wp-json\/wp\/v2\/tags?post=28603"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}