Nokia Lowers Outlook Amidst 5G Market Pressures
Nokia Oyj released its Q3 financial results, announcing a reduction in its full-year 2019 and 2020 outlooks. While expecting a strong Q4, the company faces challenges in 5G product pricing and costs.
Nokia Oyj announced its financial results for the third quarter and the period January-September 2019 on October 24, 2019. The company reported strong performance in its Nokia Software and Nokia Enterprise segments, as well as in IP routing. Momentum in 5G deployments continues, with 48 deals secured and 15 live networks launched.
Concurrently, the company announced a lowering of its full-year 2019 and 2020 financial outlooks. This adjustment stems from margin pressures, higher costs associated with first-generation 5G products, profitability challenges in China, and uncertainty related to a North American operator merger. Due to these factors, Nokia has decided to pause dividend payments.
Nokia CEO Rajeev Suri stated that the company will increase investments in accelerating 5G technology development and reducing product costs. Furthermore, Nokia plans to invest in the digitalization of internal processes to enhance overall productivity. The company also aims to strengthen its rapidly growing enterprise and software businesses.
The company's long-term target is an operating margin of 12-14%, supported by its end-to-end portfolio, diversification, and patent licensing. Nokia anticipates that its financial performance in 2021 will show improvement compared to 2020 levels.