Nokia Corp (NYSE:NOK) Shares rebounded on Friday after Thursday’s sell-off as its quarterly report failed to impress the Street.
The Finnish telecom company posted an 8% net revenue decline to $4.76 billion in the fiscal third quarter, missing the consensus estimate of $5.34 billion. The decline in sales marked weakness in the Indian market.
Also read: Ericsson third quarter profit: profit by AT&T Boost, CEO signals recovery in North America
Nokia’s market share in North America fell after losing contracts with Verizon Communications Inc (NYSE:VZ) and AT&T Inc (NYSE:T).
CEO Pekka Lundmark told Reuters that telecom remains a limited growth market for Nokia despite some recovery. Lundmark highlighted that Nokia is now targeting the data center and defense sectors for growth.
He also pointed to a recovery in demand in India, supported by the Vodafone Idea deal and a possible contract with Bharti Airtel.
Meanwhile, Nokia has cut about 2,000 employees in Greater China and 350 jobs across Europe to cut costs, Bloomberg cited sources familiar as saying.
The cost cuts are part of Nokia’s plans to cut up to 14,000 jobs to save 800 million euros ($868 million) – 1.2 billion euros by 2026, Reuters reports.
Reuters quotes Nokia’s annual report as saying it had 10,400 employees in Greater China and 37,400 in Europe as of December 2023.
The US sanctions against the Chinese smartphone giant Huawei Technologies Co cost Nokia its Chinese market, which generated 27% of its revenue in 2019, according to Reuters. Greater China generated 6% of Nokia’s revenue in the current quarter.
Chinese operators retaliated against the US embargo by rejecting European equipment. Nokia already sold part of a joint venture with Huawei in China in 2024.
Previous reports pointed to Nokia’s plans to replace Lundmark due to his failure to generate revenue for the company. However, the company dismissed the report and acknowledged their confidence in Lundmark’s leadership.
Price promotion: NOK shares are up 9.01% to $4.73 at last check on Friday.
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Photo via Nokia
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