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(Bloomberg) -- Nokia Oyj’s fourth-quarter results showed signs of improvement in its mobile telecoms equipment unit after a period of low spending by operators.
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The Espoo, Finland-based company’s net sales rose to €5.98 billion ($6.2 billion) in the fourth quarter, 10% higher than in the same quarter from a year earlier, it said in a statement on Thursday. Analysts had been expecting sales of €5.74 billion, according to an average of estimates compiled by Bloomberg. The figures were driven mostly by an increase in the network infrastructure unit, which accounts for roughly a third of its sales and an 86% increase it its high-margin patent licensing division, Nokia Technologies.
The company’s mobile networks division, which makes 5G equipment, is improving after a weak market dragged sales for two years. Nokia Chief Executive Officer Pekka Lundmark said there are signs of growth in North America, which is largely seen as a bellwether for operator spending globally.
“This is really encouraging because often when markets turn, we see them turning first in North America, both up or down,” Lundmark told reporters on Thursday.
Shares rose 4.4% to €4.49 at 12:12 p.m. in Helsinki on Thursday.
Nokia and rival Ericsson AB have been fighting for business as operators have held back on expensive network upgrades. Nokia was hit especially hard going into 2024 after Ericsson won a contract with US operator AT&T worth $14 billion to become the operator’s sole mobile equipment vendor for OpenRAN, a new technology that gives mobile operators greater choice in vendors.
Lundmark said other customers and markets will compensate for the 4% drop in mobile network sales attributed to the AT&T loss. The 9% drop in full-year sales mainly came from India, Lundmark said in an interview, where operators’ spending dropped off significantly after an extensive rollout of 5G in 2022 and 2023.
The company expects 2025 operating profit of €1.9 billion to €2.4 billion, lower than the €2.62 billion in comparable operating profit in 2024. Lundmark said the guidance represents “a strong improvement,” once you exclude one-time items amounting to more than €700 million that benefited 2024.
Nokia has been looking to expand its customer base beyond its traditional clients with a push into data centers and defense.