The company missed on both revenue and net income, despite a robust increase in the latter.
News from Nokia‘s (NOK -2.69%) corporate headquarters pushed the Finland-based company’s share price down on Thursday. The once-mighty telecom published its third-quarter results, and for the most part investors weren’t pleased with the numbers. Nokia stock closed the day more than 3% in the red, comparing unfavorably to the essentially flat performance of the benchmark S&P 500 index.
A disappointing double miss
Nokia’s interim third-quarter report revealed that the company’s net sales fell by 8% year over year to slightly over 4.3 billion euros ($4.7 billion). Heading in the other direction was net income; this increased by 22% across that same stretch of time to 358 million euros ($389 million). On a per-share basis, the latter metric shook out to 0.06 euros per share ($0.07).
Neither line item reached the consensus analyst estimate. On average, pundits tracking the telecom stock were modeling 5.21 billion euros ($5.67 billion) on the top line, and 0.07 euros ($0.08) per share for net profitability.
Management put a bullish spin on the numbers, with CEO Pekka Lundmark saying, “I am optimistic we are now turning the corner in many parts of our business, even if some continue to experience market weakness.”
He added that Nokia’s network infrastructure business produced notable sales growth during the quarter, with a growing order backlog. He also said the company continued to generate cash, with 621 million euros ($676 million) of free cash flow (FCF) coming in across the period.
Full-year guidance maintained
At the same time, Lundmark admitted that the company’s net sales recovery “is happening slower than we expected previously,” although this is somewhat offset by a rising gross margin and aggressive tackling of costs.
With this, Nokia left its full-year 2024 guidance unchanged. Its forecast for operating profit is 2.3 billion euros ($2.5 billion) to 2.9 billion euros ($3.2 billion). FCF should be 30% to 60% of operating profit.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
