Nokia Oyj shares plunged after the telecom equipment maker forecast weaker-than-expected earnings this year as carriers delay their purchases of the 5G systems that are key to its growth.
Nokia forecast earnings that missed analysts’ estimates and predicted the first quarter would be “particularly weak” as carriers in markets, including the US, delay their purchases of 5G systems to the second half of the year.
The Finnish maker of wireless networks now expects the market for telecommunications gear to remain stagnant this year before growing next year.
It predicts a “staggered” rollout in important places like the US, Japan, South Korea and China, chief executive officer Rajeev Suri said on a call with reporters.
“The market was expecting better guidance for this year, ” Inderes analyst Mikael Rautanen said in comments posted online. “The prize remains there, and Nokia is heading toward it, but the journey is foggier and bumpier than expected.”
Suri spent much of last year promising that the final months of the year would show a sharp increase in spending by US operators, which are starting 5G services.
Although the final quarter of last year delivered, lifting the full-year operating margin at the company’s key networks business to 6 percent, Nokia expects the first six months of this year to be “soft” followed by a much more robust second half.
Nokia still believes it can win market share in competition with Huawei Technologies Co (華為) and Sweden’s Ericsson AB, which last week said it expects the market for radio-access network equipment to grow by 2 percent this year.
Nokia’s forecast for full-year earnings per share of 0.25 euros to 0.29 euros lagged the average estimate of 0.32 euros, according to data compiled by Bloomberg.
The Finnish company’s earnings follow an more upbeat report from Ericsson, which said last week it reached its 2020 profitability target two years early. Nokia and Ericsson stand to gain market share at a critical time for 5G system spending from carriers globally as security concerns about Chinese competitor Huawei mount.
Executives from Nokia and Ericsson have been careful not to be seen to benefit from Huawei’s pain. Both companies manufacture in China and do business with carriers in the country. Suri on Thursday said that Nokia is closely monitoring the situation around Huawei.
“The situation is still very much in flux, and the outcome is for governments to decide, not Nokia,” Suri told reporters.
DIVIDED VIEWS: Although the Fed agreed on holding rates steady, some officials see no rate cuts for this year, while 10 policymakers foresee two or more cuts There are a lot of unknowns about the outlook for the economy and interest rates, but US Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming. Fed policymakers voted unanimously to hold interest rates steady at a range of 4.25 percent to 4.50 percent for a fourth straight meeting on Wednesday, as they await clarity on whether tariffs would leave a one-time or more lasting mark on inflation. Powell said it is still unclear how much of the bill would fall on the shoulders of consumers, but he expects to learn more about tariffs
NOT JUSTIFIED: The bank’s governor said there would only be a rate cut if inflation falls below 1.5% and economic conditions deteriorate, which have not been detected The central bank yesterday kept its key interest rates unchanged for a fifth consecutive quarter, aligning with market expectations, while slightly lowering its inflation outlook amid signs of cooling price pressures. The move came after the US Federal Reserve held rates steady overnight, despite pressure from US President Donald Trump to cut borrowing costs. Central bank board members unanimously voted to maintain the discount rate at 2 percent, the secured loan rate at 2.375 percent and the overnight lending rate at 4.25 percent. “We consider the policy decision appropriate, although it suggests tightening leaning after factoring in slackening inflation and stable GDP growth,”
Meta Platforms Inc offered US$100 million bonuses to OpenAI employees in an unsuccessful bid to poach the ChatGPT maker’s talent and strengthen its own generative artificial intelligence (AI) teams, OpenAI CEO Sam Altman has said. Facebook’s parent company — a competitor of OpenAI — also offered “giant” annual salaries exceeding US$100 million to OpenAI staffers, Altman said in an interview on the Uncapped with Jack Altman podcast released on Tuesday. “It is crazy,” Sam Altman told his brother Jack in the interview. “I’m really happy that at least so far none of our best people have decided to take them
As they zigzagged from one machine to another in the searing African sun, the workers were covered in black soot. However, the charcoal they were making is known as “green,” and backers hope it can save impoverished Chad from rampant deforestation. Chad, a vast, landlocked country of 19 million people perched at the crossroads of north and central Africa, is steadily turning to desert. It has lost more than 90 percent of its forest cover since the 1970s, hit by climate change and overexploitation of trees for household uses such as cooking, officials say. “Green charcoal” aims to protect what
RSS