Meme-stock favourite Nokia raises forecasts

Pevita Lena
Nokia is planning to axe between 5,000 and 10,000 jobs worldwide in the next two years. Photo: Pavlo Gonchar/SOPA/LightRocket via Getty

Nokia is planning to axe between 5,000 and 10,000 jobs worldwide in the next two years. Photo: Pavlo Gonchar/SOPA/LightRocket via Getty

Finnish telecommunications firm Nokia (NOKIA.HE) said on Tuesday that it expects to raise its full-year guidance as business accelerates in the second quarter.

A company statement said Nokia “expects to revise upwards its prior outlook ranges for 2021” but didn’t provide specific numbers, with additional details coming at its second-quarter results on 29 July. 

It previously expected full-year net sales, adjusted for currency swings, to reach between €20.6bn ($24.4bn, £17.6bn) and €21.8bn. 

Its previous forecast, published in April, also pointed to positive free cash flow, an operating margin of 7% to 10%, and a return on invested capital of 10% to 15%.

Nokia’s shares have been in an upward swing recently ever since Pekka Lundmark took the helm as CEO in August last year, enforcing changes after product missteps under the company’s previous management hurt Nokia’s 5G ambitions and dragged on its shares. 

Shares in the meme-stock favourite rose 6.6% on Tuesday in Helsinki following the announcement. 

Nokia shares. Chart: Yahoo Finance

Nokia shares. Chart: Yahoo Finance

“We are progressing well with our three-phased plan to achieve sustainable, profitable growth and technology leadership,” Lundmark said in a statement. “Our first-half performance has shown evidence of this in good cost control and also benefited from strength in a number of our end markets.”

Lundmark also said he still expects “some headwinds in the second half as we have previously highlighted, but our performance in the first half provides a good foundation for the full year.”

Read more: SoftBank leads investment in UK tech as London continues to attract capital flows from Asia 

Nokia announced plans earlier this year to axe between 5,000 and 10,000 jobs worldwide in the next two years as it cuts costs.

The firm, which specialises in information technology and consumer electronics also got a boost following the ban on Huawei from several European countries. This gave it access to other markets and it could get more 5G business in China amid a tussle between the Swedish government and Huawei.

More 5G business puts Nokia on a better footing against main Swedish rival Ericsson (ERIC) and Huawei. 

Swiss investment bank UBS (UBS) expects “solid organic growth” in the Q2. It also anticipates investors will focus on cash flow generation beyond revenue growth and profitability.

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