Nokia CEO and president Pekka Lundmark has laid out details of a promised revised outlook on the back of a strong Q2 performance, as he hailed the benefits of a new operating model which is driving its turnaround.
The global tech giant stated earlier this month it expected to raise its outlook.
In its earnings statement, Lundmark noted following “a robust start to 2021”, it was now expecting sales for full year 2021 to be in the €21.7 billion to €22.7 billion range, up from €20.6 billion to €21.8 billion.
Nokia also lifted operating margin outlook to 10 per cent to 12 per cent from 7 per cent to 10 per cent, after executing “faster than planned on our strategy in the first half which provides us with a good foundation for the full year”.
However, Lundmark warned it still expected to face headwinds in the second half, particularly with market share loss and price erosion in North America.
“Therefore, we still expect our typical quarterly earnings seasonality to be less pronounced in 2021. In addition, we continue to accelerate R&D investments and monitor risks around component availability, considering the strong demand for our products,” he added.
Notably, despite the caution, Nokia sealed a high-profile 5G contract in China after reporting for this period had ended, which could boost earnings going forward.
Revenue in Q2 on a constant currency basis was up 9 per cent year-on-year to €5.3 billion, driven by growth across all business groups, with particular strength in Network Infrastructure where it continued to gain market share, while also benefitting from a one-time software deal and 5G growth.
Net profit rose from €99 million to €351 million.
Mobile Networks sales were up 3 per cent to €2.4 billion; Network Infrastructure rose 20 per cent to €1.8 billion; Cloud and Networks services increased 2 per cent to €703 million; and Nokia Technologies hit €401 million, a 20 per cent increase.
The latter benefited from new licensing deals, resulting in higher income.