Despite Solid Quarter, Nokia Lowered 2019 and 2020 Outlook

Nokia reported a solid third quarter 2019 results with increase in sales and profit year over year. However, the company expects that the results for the whole year 2019, as well as 2020, will be lower than previously announced.

Net sales in in the last quarter were €5.7 billion, compared to €5.5 billion in Q3 2018. On a constant currency basis, net sales increased 1%. Solid performance was driven by improved industry demand and the competitiveness of their end-to-end portfolio, with growth across four out of six regions and all customer types.

"Nokia delivered a solid third quarter, with positive free cash flow; widespread sales growth; solid operating margin; strong performances in Nokia Enterprise, Nokia Software and IP Routing; and good progress towards meeting our 2019 cost reduction goals. We are proud to have launched 15 live 5G networks with customers, including Sprint, Verizon, AT&T and T-Mobile in the US; Vodafone Italy and Zain in Saudi Arabia; as well as SKT, KT and LGU+ in Korea," said Rajeev Suri, CEO, Nokia.

He added that many of their businesses are performing well and expects Q4 to be strong, with a robust operating margin and an increase in net cash of approximately €1.2 billion. "At the same time, some of the risks that we flagged previously related to the initial phase of 5G are now materializing. We expect that we will be able to progressively mitigate these issues over the course of next year. Given the investments and the risks we see materializing, we are adjusting our targets for full-year 2019 and 2020; and we expect our recovery to drive improvement in our 2021 financial performance relative to 2020," Suri said.

CEO concluded that he is confident that their strategy remains the right one. "We continue to focus on leadership in high-performance end-to-end networks with Communication Service Providers; strong growth in enterprise; strengthening our software business; and diversification of licensing into IoT and consumer electronics.