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Nokia’s 2023 financial results reflect the gloom of the current market, similar to Ericsson and AT&T’s results which have also been published this week
This week, Nokia have released their financial results for Q4 and the full 2023 financial year. Net sales decreased 21% year-on-year in Q4, which the company put down to continuing macroeconomic uncertainty impacting operator spending. Net sales for the year declined 8% year-on-year.
“In 2023 we saw a meaningful shift in customer behaviour impacting our industry driven by the macro-economic environment and high interest rates along with customer inventory digestion,” said Pekka Lundmark, Nokia’s President and CEO in a statement.
Despite Nokia’s success in the current climate, Lundmark warned that the same “challenging environment” of 2023 will continue into this year Nokia’s biggest revenue division, mobile networks, saw a 17% year-on-year decrease in sales to €2.5 billion in Q4, with Lundmark suggesting that 2024 will see operators remain cautious in terms of network investment.
In Q4 cash flow performance was positive, generating €1.7 billion of free cash flow, and ending the quarter with net cash flow of €4.3 billion.
Looking ahead at the next year, Nokia expects to see a comparable operating profit of between €2.3 billion to 2.9 billion
Upon the news, Nokia shares had risen by 8.5%.
These results come just a month after Nokia was struck a major blow when US operator AT&T signed a $14 billion 5G deal with Ericsson, significantly reducing Nokia’s presence in the US giant’s network. The deal negatively impacted Nokia share price, seeing it drop down 25% compared to the same time last year.
Lundmark called the deal a “disappointing development” for Nokia, but added he believes Nokia has the right strategy to achieve a double-digit operating margin longer-term.
Other key market players such as Ericsson and AT&T have also released their financial results this week, which also reflect the conservative nature of the market, with operators expected to heavily cut back on their purchases of 5G equipment. This has led to extensive cost-saving measures throughout the industry, with both operators and vendors implementing job cuts.
Back in February last year Ericsson announced it would cut 8,500 jobs.
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