Nokia Oyj CEO Pekka Lundmark yesterday said that he would do “whatever it takes” to catch up with rival telecommunications equipment manufacturers in introducing 5G wireless technology.
Lundmark, who took the top job on Aug. 1, would abandon predecessor Rajeev Suri’s strategy, dubbed “end-to-end,” the Finnish company said in a statement yesterday.
End-to-end sought to provide customers with complete network systems, from physical equipment, such as antennas and optical cables, to software and other services.
Nokia is to adopt “a more focused approach,” the company said, as it looks to break down how it sells to clients and target higher-value sectors.
Nokia shares yesterday fell more than 15 percent in Helsinki trading, after the company reported sales that missed analyst estimates and lowered its outlook for the year.
“We have lost share at one large North American customer — see some margin pressure in that market — and believe we need to further increase R&D [research and development] investments to ensure leadership in 5G,” Lundmark said. “In fact, we have decided that we will invest whatever it takes to win in 5G.”
The Espoo, Finland-based company is seeking to catch up with rivals Ericsson AB and Huawei Technologies Co (華為) after early stumbles in the market for 5G and trouble integrating its giant Alcatel-Lucent purchase from 2016.
Nokia reported sales in the third quarter of 5.29 billion euros (US$6.21 billion), missing analyst estimates for 5.42 billion euros.
The company is well placed to take advantage of bans on some vendors, Lundmark told reporters by telephone.
A growing number of governments are placing restrictions or outright exclusions on equipment made by Huawei.
Nokia, which a year ago paused its dividend to funnel more cash to R&D, said that payouts are likely to resume once its net cash position improves to about 2 billion euros.
Nokia said that it ended the second quarter with a net cash balance of 1.9 billion euros.
“Our goal is to better align with the needs of our customers and through that, increase accountability, reduce complexity and improve cost-efficiency,” Lundmark said.
Nokia downgraded its prospects, saying that it expects to underperform in a declining market.
It had previously said that it expected a “flattish” market for this year.
Next year, it expects an adjusted operating margin in the range of 7 to 10 percent, missing the average analyst estimate of 10.6 percent.
For this year, it now sees adjusted earnings per share of 0.20 euros to 0.26 euros, compared with 0.20 euros to 0.30 euros previously, and an adjusted operating margin of 8 to 10 percent, compared with an earlier 8 to 11 percent.
Alphabet Inc’s Google on Tuesday announced plans to buy a New York office building for US$2.1 billion, confirming its push into the US’ largest city despite the COVID-19 teleworking trend. This is the largest real-estate purchase in the US for an office building since the beginning of the global spread of COVID-19, the Wall Street Journal quoted Real Capital Analytics as saying. Google already rents the premises in Manhattan, which are located on the site of a former railroad terminal in the Hudson Square neighborhood. The Silicon Valley giant envisions a campus with a total surface area of 160,000m2 by mid-2023
‘CORE VALUES’: The contract chipmaker did not specify why the employees were dismissed, but media reports said they had leaked information about customer orders Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has fired seven of its employees for violating the company’s “core values,” the world’s largest contract chipmaker said yesterday. While the company did not disclose exactly why it fired the seven employees, local media reports earlier in the day said that the employees had leaked confidential information about customer orders. In a statement, the company said that it fired the seven at once, adding that it released an internal notice last week to inform the entire company of the move ahead of the four-day Mid-Autumn Festival holilday, which ended on Tuesday. TSMC said it fired the seven
Cash-strapped developer China Evergrande Group (恆大集團) has begun repaying investors in its wealth management products with real estate, said Hengda Real Estate Group Co Ltd (恆大地產), its main unit. Evergrande, with more than US$300 billion in liabilities, is in the throes of a liquidity crisis that has left it racing to raise funds to pay its many lenders and suppliers. It has a bond interest payment of US$83.5 million due on Thursday. The company said on WeChat on Saturday that investors interested in redeeming wealth management products for physical assets should contact their investment consultants or visit local offices. Financial news outlet Caixin on
MILD ADJUSTMENT: Two previous efforts failed to curtail mortgage financing, although the new measures should not affect property prices, the central bank governor said The central bank yesterday tightened credit controls for second-home mortgages in specific areas and purchases of plots of land, especially in industrial parks. However, the nation’s top monetary policymaker kept its policy rate at a record-low 1.125 percent for the sixth consecutive quarter, despite revising up its GDP growth forecast for this year from 5.08 percent to 5.75 percent. “Board members factored in economic uncertainty at home and around the world,” central bank Governor Yang Chin-long (楊金龍) said, adding that growing inflationary pressure was a temporary phenomenon induced by bad weather and a low base effect for oil prices. International fuel price increases