Nokia reported a small Q3 profit on continued poor mobile sales
Sales aren't strong on the back of Indian-focused woes
The CEO, however, said that private networks and APIs present encouraging future signs
Nokia continued to report a fall in mobile sales for the third quarter (Q3) but the vendor’s CEO Pekka Lundmark said on an investor overview today that the company was “turning the corner” and expects to file a profit in Q4, albeit on the lower end of its expectations.
“Mobile network sales declined by 17%,” CFO Marco Wirén said on the earnings call. “This was mainly driven by the decrease in India....”
The CFO also noted a continued decline in North American sales, which would be largely due to AT&T switching from its long-time radio access network supplier (RAN) supplier Nokia to Ericsson in December 2023. As a result of that switch, Ericsson reported North American sales up 55% in Q3, which is largely down to the AT&T deal.
While sales in India have declined, Lundmark highlighted recent deals with Vodafone Idea in India, NTT DoCoMo in Japan as well as in Brazil, New Zealand and Vietnam where the company has either gained or maintained market share, Lundmark said.
“In addition to the deals we have been winning, the team has also done an excellent job in managing their cost base,” the CEO added. This factor was also noted by analysts that Fierce spoke to on Thursday.
Private network and API futures?
In mobile networks, the vendor continues to work on the non-CSP [mobile operator] segments, CEO Lundmark noted on the call. “Private wireless, where we are a market leader, we have almost 800 customers in that segment at the moment, fast growth,” he said. “This is one of our strategic pillars,” the CEO said on the investor overview.
Lundmark also noted that 5G API business is growing for Nokia. “September marked the one-year anniversary of the launch of our Network-as-a-Code platform, we ended the quarter with more than 20 partners including many of the world’s leading CSPs,” the CEO said.
Lundmark also said that telco will not be a growth market for the vendor going forward. Instead the company has turned its focus for growth to data center. "There will be others as well, but that will be the number one," he said.
Overall, Nokia reported a 9% rise in net profit of million €358 ($389 million) for the summer quarter. Sales, however, fell 8% to fell 8% to €4.33 billion ($4.70 billion). Nokia maintained that it would meet its full-year profit outlook of €2.3 billion to €2.9 billion, but the CEO said it was “tracking within the bottom half of range” on the Q3 call.
'It's meh!'
“It’s meh!” Earl Lum of EJL Wireless said of Nokia’s Q3 results. “One big surprise was a top-line miss for the quarter,” he noted. “India will probably offset any profitability anywhere around the world [in Q4],” he noted.
“It looks like the damage they took with AT&T has leveled off,” Daryl Schoolar, analyst at Retcon Analytics said. “Asia-Pacific was a big hit though,” he said.
On the bright side though, Nokia is delivering profit even if their sales continue to be down.