Nokia Corp. (NYSE:NOK) stock rebounded on Friday from Thursday’s sell-off as its quarterly report failed to impress the Street.
The Finnish telecommunications company reported fiscal third-quarter net sales fell 8% to $4.76 billion, missing the consensus estimate of $5.34 billion. The decline in revenue marked the weakness in the Indian market.
Also read: Ericsson Q3 Earnings: AT&T Boost Earnings, CEO Points to North American Recovery
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 telecommunications remains a limited growth market for Nokia despite some recovery. Lundmark highlighted that Nokia is now focusing on growth in the data center and defense sectors.
It also pointed to a pick-up in demand in India, supported by the Vodafone Idea deal and a possible contract with Bharti Airtel.
Meanwhile, Nokia has cut around 2,000 employees in Greater China and 350 jobs across Europe to cut costs, Bloomberg cites familiar sources.
The cost cuts are part of Nokia’s plans to cut up to 14,000 jobs to save between €800 million ($868 million) and €1.2 billion by 2026, Reuters reports.
Reuters cites Nokia’s annual report stating that, as of December 2023, it had 10,400 employees in Greater China and 37,400 in Europe.
US sanctions on Chinese smartphone giant Huawei Technologies Co. It cost Nokia its Chinese market, which generated 27% of its sales in 2019, according to Reuters. Greater China generated 6% of Nokia’s sales in the current quarter.
Chinese operators retaliated against the US embargo by snubbing European equipment. Nokia has already sold part of a joint venture with Huawei in China in 2024.
Previous reports indicated Nokia’s plans to replace Lundmark because he failed to generate revenue for the company. However, the company dismissed the report and acknowledged its faith in Lundmark’s leadership.
Price action: NOK shares were up 9.01% at $4.73 at last check on Friday.
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Photo via Nokia
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