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Shares of the telecom equipment maker Nokia (HE:NOKIA) (NYSE:NOK) are down over 7% in pre-market Thursday after the company slashed its full-year sales forecast.
Nokia posted a Q1 EPS of €0.06, lower than the analyst estimate of €0.08. Revenue for the quarter came in at €5.86 billion, again below the consensus estimate of €6.22B.
Analysts also flagged margin compression with the adjusted operating and gross margins coming in at 8.2% and 37.7%, respectively. Analysts were looking for 9.6% and 39.3%, respectively.
“We are starting to see some signs of the economic environment impacting customer spending. Given the ongoing need to invest in 5G and fiber, we see this primarily as a question of timing; nevertheless we will maintain our cost discipline to ensure we can successfully navigate this uncertainty. We remain on track to deliver another year of growth in 2023 so our outlook is unchanged with the expectation that profitability in the second half of the year will be stronger than the first half,” CEO Pekka Lundmark said in a press release.
Given these macro pressures, the company cut its full-year revenue outlook to $25.4B (up or down $800 million), from the prior $25.7B forecast. The adjusted operating margin is seen in the range of 11.5-14%, better than the expected 12.3% forecast.
Jefferies analysts blamed the weakness in the U.S. market as a key factor behind the underperformance.
