HELSINKI STOCKHOLM Nokia beat quarterly operating profit expectations and forecast higher 2023 sales as the Finnish telecom equipment maker said it had been able to gain market share, benefitting from 5 G roll-out in countries such as India.
Chief Executive Pekka Lundmark told Reuters that the growth was broad-based and that India was the highlight of the story. Nokia shares opened up 5.8 per cent in Helsinki.
In 2023, Nokia saw a year of growth ahead of it, in contrast to its main rival Ericsson, according to Lundmark.
Ericsson had reported lower than expected fourth-quarter core earnings and said it expected a fall in margin in its Networks business through the first half of 2023, citing weak sales of 5 G equipment in markets such as the United States.
When asked about Nokia's better outlook than its rivals, Lundmark said that the reason is that we have a more optimistic view on the size of the Indian market.
He added that Nokia has also managed to diversify its customer base from network service providers to industrial customers who have set up their own private 5 G networks at power plants, utilities and mines.
Lundmark said that the world economy is only 30 per cent digitalized compared to what the full potential is and that is exactly what we are seeing in the enterprise business.
Nokia's fourth quarter comparable operating profit went to 1.15 billion euros $1.26 billion from 908 million last year, beating the 924.6 million euro mean forecast of 10 analysts polled by Refinitiv.
Demand remains robust as we look forward to 2023, despite the uncertain economic outlook, according to Lundmark.
Nokia predicted full-year net sales of between 24.9 billion euros and 26.5 billion euros, which implies a 2 per cent and 8 per cent growth in the constant currency. Net sales increased by 16 per cent to 7.45 billion euros, beating estimates of 7.11 billion euros.
Lundmark said that the constraints on chip supplies had eased.