Nokia Oyj NOK shares are trading lower by around 9% after it reduced its 2023 net sales guidance and narrowed the operating margin outlook.
2023 guidance: The company cut net sales expectations to €23.2 billion-€24.6 billion (from €24.6 billion-€26.2 billion previously) and now projects comparable operating margin to 11.5%-13% (from 11.5%-14% guided earlier).
The company expects weaker demand in H2 due to both the macroeconomic environment and customers’ inventory digestion.
Nokia notes sluggish customer spending on high inflation and rising interest rates, with some projects now postponing to 2024, mainly in North America.
The company sees normalizing inventory at customers following supply chain-related challenges in the past two years.
Q2 preliminary result: The company expects net sales of around €5.7 billion, flat Y/Y in constant currencies, and a comparable operating margin of around 11%.
Nokia expects Q2 operating profit to benefit by about €80 million from catch-up sales in Nokia Technologies business.
The company reiterated its long-term targets of a comparable operating margin of at least 14%.
Nokia plans to release Q2 and H1 2023 results on July 20.
Also Read: Nokia Bolsters Position in India's 5G Market through Multi-Billion Dollar Deal with Reliance Jio
Price Action: NOK shares are trading down 9.43% at $3.94 premarket on the last check Friday.
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