New Nokia President and CEO Pekka Lundmark (C) shakes hands with President and Chief Executive Officer Rajeev Suri after a press conference at Nokia headquarters in Espoo, Finland on 2 March 2020.
Markku Ulander | Lehtikuva | AFP via Getty Images
Nokia saw earnings rise 22% to 316 million euros ($ 376 million) in the second quarter despite quarterly revenue falling 11% to 5 billion euros.
The mobile network equipment maker, which published financial results for the period April to June on Friday, said the coronavirus crisis has reduced net sales by some 500 million euros during the first half of the year. However, he expects most of the lost sales to carry over to future periods.
The Espoo-based Finnish firm said it was able to increase profitability for the second quarter and improve its profit outlook for 2020, by reducing its services business and signing fewer 5G deals in the highly competitive Chinese market.
Rajeev Suri, president and chief executive officer of Nokia, said that most of the decline in the company’s revenue was “the result of Covid-19, as well as a sharp decline in China based on the cautious approach we have taken in that market”.
He added: “We also saw a reduction driven by our proactive steps to reduce the volume of the low margin services business.”
Incoming CEO Pekka Lundmark will take over Nokia this weekend, and the company is in a better position than analysts anticipated.
Nokia’s second-quarter underlying earnings rose to 0.06 euros per share, compared to 0.05 euros the previous year, beating the consensus of 0.03 euros in a Refinitiv survey.
The company improved its 2020 forecast for underlying earnings per share from 0.18 to 0.28 euros to between 0.20 and 0.30 euros.
Rival firm Ericsson, based in Stockholm, Sweden, reported an increase in 5G network sales and software revenue earlier this month.
Both Nokia and Ericsson are poised to take advantage of Huawei’s uncertain future in the West as the government cracks down on the Shenzhen tech giant amid fears the company may spy on the Chinese government. Huawei has repeatedly denied the allegations.
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