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Nokia said revenue would decline for the second year in a row in 2021.
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Nokia
Stock fell 7% early on Thursday, as the telecoms manufacturer expected expectations in the fourth quarter but warned that 2021 would be a “challenging” year.
The stock has been on something of a roller-coaster route in recent weeks, becoming one of the favorite stocks among retail investors on Reddit’s WallStreetBets forum. It was moving again in early trading, falling 7%, while the shares held in Finland fell 4%.
Shares climbed 55% in the three-day spot last week, forcing the company to release a statement saying they could not explain the rally. It has withdrawn nearly 30% since then but is still 11.5% so far this year, and the stock listed in Finland has gained 15% so far in 2020.
Read:Nokia says it can’t explain the 70% stock increase
Citi analysts said the impact of “unusual volatility” in trading on Thursday could be ahead of the company’s earnings call.
The company’s fourth-quarter earnings were stronger than expected as sales fell 4.8% to € 6.57 billion, beating FactSet’s consensus of € 6.4 billion, led by 5G margin expansion. An improved net profit of € 814 million also surpassed the consensus of € 622 million.
Nokia and its Viking rival
Ericsson
has benefited from several countries banning Huawei China from 5G networks for reasons of national security. Ericsson’s impressive earnings last week show that it has seen more of that gain so far than Nokia.
Read:Nokia is getting an update as Ericsson’s earnings were so good
The Finnish company said deficits in North America and China had an impact on the rate of conversion of its 4G footprint to 5G in 2020 but balanced by the benefits of footprinting in Europe. He lost out to
Samsung
on a large $ 6.6 billion 5G contract
Verizon
in September.
Nokia said revenue would decline for the second year in a row in 2021 – net sales are expected to be between € 20.6 billion and € 21.8 billion, after falling 6% in 2020 to € 21.9 billion.
“We anticipate a challenging 2021 year, a year of transition, with significant headlines due to the loss of market share and price declines in North America,” said CEO Pekka Lundmark.
Citi analysts said the 2021 revenue outlook looked broadly consistent and was not “as bad as some on the buying side. ”
Kepler Cheuvreux analysts said that despite a short-term headline, the valuation is still “unconfirmed. ”
“The company is investing in R&D [research and development] to create momentum and build market share within 5G. We are upholding the Purchase recommendation as expectations have been revalued and the valuation is still not required, ”they said.
Lundmark, which has been at the helm since August 2020, promised that the company would do “whatever it takes” to lead in 5G, when it unveiled a new strategy in October.