Nokia revenue drops 3% to €5.7 bn as telecoms cut Capex

Nokia has posted second quarter revenue of €5.7 billion as compared with €5.9 billion during the second quarter of 2022 as telecom operators started cutting their Capex in 5G network business.
Q2 2023 Nokia salesNokia said gross margin fell to 38.8 percent from 40.6 percent. Nokia’s operating margin dropped to 11 percent from 12.2 percent.

“Considering the significant decline in major North American operators’ investments, our operating margin has proved resilient, even adjusting for the EUR 80 million of catch-up net sales in Nokia Technologies,” Pekka Lundmark, President and CEO of Nokia said.

Nokia has generated sales of €4,561 million (–2 percent) from Communications service providers; €510 million (+27 percent) from Enterprise; €334 million (+10 percent) from Licensees and €304 million (–14) percent from Others.

Nokia has generated sales of €1,978 million (–6 percent) from Network Infrastructure; €2,623 million (+5 percent) from Mobile Networks; €742 million (+2 percent) from Cloud and Network Services; €334 million (+10 percent) from Nokia Technologies.

Nokia has generated sales of €527 million (–3 percent) from Asia Pacific; €1,523 million (+11 percent) from Europe; €344 million (–12 percent) from Greater China; €1,043 million (+355 percent) from India; €230 million (–15 percent) from Latin America; €478 million (+3 percent) from Middle East & Africa; €1,293 million (–40 percent) from North America and €272 million (–5  percent) from Submarine Networks.

Nokia, the Finnish telecommunications giant, has revised its sales outlook for 2023. The company now projects its sales to range from EUR 23.2 billion to EUR 24.6 billion, a decrease from the previously forecasted EUR 24.6 billion to EUR 26.2 billion.

Nokia’s decision to adjust its sales outlook comes as a result of proactive measures taken by its business groups to manage costs effectively. Despite the challenges faced, these measures have played a crucial role in mitigating the impact on the company’s operating margin. As a result, the new projected operating margin range stands at 11.5% to 13.0%, slightly narrower than the prior forecast of 11.5% to 14.0%.

The company remains optimistic about its future prospects, particularly in the Network Infrastructure sector. Nokia believes that most of the impacts in this segment are temporary and short-term in nature. Looking ahead, the company anticipates significant growth opportunities, which are expected to be bolstered by the ongoing efforts to diversify its customer base through expansion in the enterprise and webscale sectors.

Regarding the Mobile Networks division, Nokia has highlighted a crucial need for operators to invest in 5G technology. It has been revealed that only approximately 25% of the potential mid-band 5G base stations have been deployed outside of China so far. This indicates substantial untapped potential for growth in the 5G market, and Nokia is poised to play a pivotal role in providing solutions to meet the rising demand for 5G infrastructure.

While the revised sales outlook may pose certain challenges in the short term, Nokia remains steadfast in its commitment to delivering cutting-edge solutions and services to its customers worldwide. The company’s efforts to adapt and diversify its operations are expected to position it strongly for sustained growth beyond 2023.

Investors and industry experts are closely monitoring Nokia’s actions and strategies as the company navigates through the dynamic telecommunications landscape, with optimism that it will continue to be a major player in shaping the future of global communication technologies.