Nokia Plans to Raise Full-Year Guidance After Strong Quarter
(Bloomberg) -- Nokia Oyj said it will probably raise its full-year outlook, citing a stronger-than-expected second quarter in which the network equipment maker was able to keep costs in check as demand picked up.
The Finnish company didn’t provide numbers but “expects to revise upwards its prior outlook ranges for 2021,” with additional details coming at its second-quarter results on July 29, it said in a statement on Tuesday. Nokia previously said it expected full-year net sales, adjusted for currency swings, to reach between 20.6 billion euros ($24.4 billion) and 21.8 billion euros.
Shares rose 4.3% to 4.82 euros at 9:05 a.m. in Helsinki.
Nokia’s stock has risen 46% since the start of the year and several analysts have upgraded the stock, lending support to a turnaround effort by Chief Executive Officer Pekka Lundmark, who took the helm in August 2020. He has announced plans to cut as many as 10,000 jobs to simplify the company after years of mergers, and to invest more in the race to upgrade global wireless systems to 5G against his main rivals -- Sweden’s Ericsson and China’s Huawei Technologies Co.
“We are progressing well with our three-phased plan to achieve sustainable, profitable growth and technology leadership,” Lundmark said in the statement. “Our first-half performance has shown evidence of this in good cost control and also benefited from strength in a number of our end markets.”
Its previous 2021 outlook, published in late April, also pointed to positive free cash flow, an operating margin of 7% to 10%, and a return on invested capital of 10% to 15%.
Lundmark also said he still expects “some headwinds in the second half as we have previously highlighted, but our performance in the first half provides a good foundation for the full year.”
©2021 Bloomberg L.P.