HELSINKI (AFP) – Equipment maker Nokia more than doubled its net profits in the third quarter as the firm’s new CEO promised yesterday to do “whatever it takes” to become the 5G market leader.
On his first results day since taking the reins of the Finnish networks giant in August, Pekka Lundmark announced a move to a more focussed approach as the company vies for 5G market share against competitors Ericsson and Huawei.
“In those areas we choose to compete, we will play to win,” he told reporters yesterday. “We will do whatever it takes to lead in 5G and we are ready to invest more.”
Despite a “disappointing” seven-per cent fall in net sales, in part due to poor services performance, Nokia posted a EUR193-million (USD227 million) net profit for the three months to September, up from EUR82 million in the same period last year.
The non-IFRS operating margin, which excludes certain costs, rose to 9.2 per cent against 8.2 per cent one year earlier, bringing the firm’s year-to-date operating margin to around nine per cent.
But increased profitability did not keep Nokia from downgrading its 2020 outlook, lowering its expected non-IFRS earnings per share by two cents to EUR0.23 euros (USD0.27) in part due to difficulties in the North American market, the firm said.
This quarter Nokia passed the milestone of 100 5G deals, although the company still trails Ericsson and Huawei in the race to deploy next-generation super-fast networks. However European and United States (US) restrictions on Chinese-made equipment in 5G networks introduced this year have allowed Nokia to win contracts in the United Kingdom and Finland, among others, in recent weeks to replace Huawei equipment.
“Some of the geopolitical trends are opening up new opportunities,” Lundmark said, adding that progress in 5G product development has been “excellent”.
Nokia also reported yesterday that factory closures earlier in the year due to the COVID-19 pandemic cost it around EUR200 million, but that it expects to save EUR250 million across the whole year in travel and personnel expenses.