Nokia’s new president and CEO Pekka Lundmark (C) shakes hands with outgoing president and CEO Rajeev Suri after a press conference at Nokia’s headquarters in Espoo, Finland, on March 2 of 2020.
Mark Ulander Photograph of AFP sheets via Getty Images
Nokia increased its profits by 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 released financial results for the period April-June, said the coronavirus crisis has reduced net sales by about 500 million euros during the first half of the year. Still, he expects most of the lost sales to be moved to future periods.
The Espoo-based Finnish firm said it was able to boost profitability for the second quarter and improve its earnings prospects by 2020, boosting its services business and signing fewer 5G offerings in the highly competitive Chinese market.
Rajeev Suri, president and CEO of Nokia, said most of the company’s declining revenue was “the result of Covid-19, as well as a sharp decline in China based on the prudent approach we have taken.” in this market “.
He added: “We also saw a reduction driven by our proactive steps to reduce the turnover of low-margin services.”
Pekka Lundmark, the CEO to be introduced, will take on Nokia this weekend and the company is in a better position than analysts had predicted.
Nokia’s underlying second-quarter Nokia results rose to 0.06 euros per share, up from 0.05 euros the previous year, surpassing consensus of 0.03 euros in a Refinitiv survey.
The company improved its forecast for 2020 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, saw an increase in network sales and 5G software revenue earlier this month.
Both Nokia and Ericsson are willing to take advantage of Huawei’s uncertain future in the West, as the government has shrunk to technology giant Shenzhen instead of fears the company could spy on the Chinese government. Huawei has repeatedly denied the allegations.