Finnish telecom equipment manufacturer Nokia ended the year 2020 with better performance in the fourth quarter. However, against all expectations, the company warns that its business for the year 2021 is likely to be difficult.
Nokia's business for the year 2020 performed very well in the fourth quarter. During this period, the telecom equipment manufacturer recorded good results that exceeded market expectations. Indeed, the group's sales and underlying profit were better than expected.
However, in Q4, the Finnish company experienced a partial decline in 5G equipment sales growth. This was due in particular to the decline in Radio Access Networks (RANs). This activity reported a 7% decline in turnover. 5.04 billion.
Over the period from October to December, Nokia recorded a total decline of 5% in sales. Sales thus amounted to 5.67 billion euros. This is slightly above the market forecast of 6.42 billion euros on average. On the other hand, underlying earnings were 0.14 euro per share, compared to 0.15 euro in Q4 2019.
Although the multinational telecommunications company Nokia ended the year 2020 with a leap in Q4, it remains less optimistic about the year 2021. Indeed, the Finnish group has announced that this year's business will be difficult. In 2020, it had recorded revenues estimated at 21.9 billion euros.
21.9 billion. The telecom equipment manufacturer warned that its revenues would show a decline in 2021. They should be between 20.6 billion and 21.8 billion euros. 21.8 billion. Nokia has also estimated that it expects its underlying operating margin to be between 7% and 10%, compared with 9.7% last year.
According to Nokia's CEO, 2021 will be a year of transition and will be buffeted by significant headwinds. This is due in particular to the loss of market share and price erosion in North America. It should be remembered that since he took office last August, the head of the Finnish telecom equipment manufacturer has begun a major strategic reorganization within the company.
In addition, in the equity markets, Nokia's share price has shown wide fluctuations in the last two weeks. Indeed, the group's shares have been the object of a speculative frenzy on the markets.
For some time now, Nokia has been putting the means on its side to better position itself on the 5 G market. The group's new CEO, Pekka Lundmark, presented the ambitions of the telecom equipment manufacturer in this sector. He believes that his company has not yet made much progress in 5G (in China). But this could happen in the future.
Indeed, the Finnish company is trying to catch up with its competitors in this field. In fact, it has seen the number of its customers increase. This is also the case with rival Ericsson. For their part, operators have already started to roll out 5G networks. This has been triggered by the fact that Huawei has been sidelined by several governments because of security issues. Ericsson appears to be the company that seems to be benefiting more from this situation.