Nokia posts second-quarter profit jump ahead of CEO change

Nokia

The Finnish telecom network gear maker Nokia reported an unexpected rise in its own underlying profit on Friday regardless of the coronavirus pandemic, while its new CEO Pekka Lundmark takes over this weekend.

KEY POINTS:

  • Nokia reports an unexpected rise in underlying profit
  • The company had been lagging behind some of its rival business in terms of 5G sales
  • Nokia’s new CEO Pekka Lundmark takes over this weekend

Lagging behind its rivals China’s Huawei and Sweden’s Ericsson in 5G community sales, Nokia said its April-June inherent earnings climbed to 0.06 euros per share from a gain of 0.05 euros per year ago, beating the 0.03 euros consensus in a Refinitiv poll.

Its more profitable Nordic peer Ericsson had previously reported an increase in software earnings and 5G network sales, and maintained its targets for 2020 and 2022.

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However, Nokia’s quarterly earnings fell 11% to 5.09 billion euros (approximately $6.05 billion), overlooking the 5.28 billion euro consensus amount, according to Refinitiv data.

Nokia-level earnings was down with the vast majority of that the consequence of COVID-19 in addition to a sharp decrease in China, its CEO Rajeev Suri said in a statement.

The company estimated that coronavirus hurt sales in the first half of the year by about 500 million euros.

“We expect that the majority of sales missed in the quarter due to coronavirus will shift to future periods,” Suri said.

Suri, who steps down after over a decade in charge of Nokia and Nokia Siemens Networks, leaves the company to his successor Pekka Lundmark with weak profitability in a market situation.

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The direction change at Nokia comes as turbulence prevails in European telecoms markets, together with rising pressure from authorities for operators to exclude or limit the usage of 5G equipment from China’s Huawei Technologies.

Lundmark, that takes over this Saturday, will team up with chairwoman Sari Baldauf to attempt to continue the momentum and drive the business forward.

The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our content partners at Thomson Reuters. Reporting by Anne Kauranen and Supantha Mukherjee. Editing by Jacqueline Wong and Sherry Jacob-Phillips.

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