Nokia Reports 20% Sales Decline in Q3 2023 Amid Cut in Capex by Telecoms

In a recent financial update, Nokia, the global telecommunications and technology company, revealed a significant 20 percent decline in its sales for the third quarter of 2023. The challenging business environment, coupled with higher interest rates, continued to exert pressure on operator spending, resulting in a drop in revenues.
Interleaved Passive Active Antenna from Nokia

Nokia reported third-quarter revenue figures as follows:

Asia Pacific: €503 million (down 21 percent)

Europe: €1,345 million (down 12 percent)

Greater China: €286 million (down 31 percent)

India: €567 million (up 102 percent)

Latin America: €262 million (down 21 percent)

Middle East & Africa: €489 million (up 2 percent)

North America: €1,256 million (down 45 percent)

Submarine Networks: €273 million (down 4 percent)

The breakdown of revenue by business segment is as follows:

Network Infrastructure: €1,807 million (down 18 percent)

Mobile Networks: €2,157 million (down 24 percent)

Cloud and Network Services: €742 million (down 7 percent)

Nokia Technologies: €258 million (down 15 percent)

Nokia attributed the 19 percent decline in Mobile Networks to the North American market, where customers prioritized cash flow and reduced their inventories. Meanwhile, Network Infrastructure faced a 14 percent decline, primarily due to macroeconomic uncertainties and customer inventory issues. Nokia Technologies also experienced a 14 percent drop in net sales, while Cloud and Network Services showed more resilience with a 2 percent decline.

Further insights into Network Infrastructure include:

Network Infrastructure net sales decreased by 18 percent in the third quarter, driven by factors like normal lead times, macroeconomic uncertainties, and customer inventory management.

IP Networks net sales fell by 24 percent, mainly due to challenges faced by North American CSPs in their spending evaluations.

Optical Networks, on the other hand, exhibited 4 percent growth, primarily influenced by the Indian and Middle East and Africa markets.

Fixed Networks net sales decreased by 19 percent, with North America experiencing slower fiber investments, while Asia Pacific witnessed growth.

In the case of Mobile Networks:

A 24 percent decline in net sales was largely driven by North America, where customers were focused on managing cash flow and depleting their inventories.

The business continued to benefit from 5G deployments in India, with substantial year-over-year growth, albeit with a sequential decline as deployment normalized.

Other regions saw declines, except for modest growth in the Middle East and Africa.

Despite these challenges, Nokia has set ambitious goals for 2023, aiming to achieve sales between €23.2 billion and €24.6 billion, representing a growth range of -4 percent to +2 percent in constant currency terms. The company remains committed to navigating the ever-evolving telecommunications landscape and capitalizing on opportunities to secure its market share.