(Reuters) – Finnish mobile network equipment maker Nokia on Thursday reported a surprise rise in second-quarter profit, citing an increase in demand, with the preservation of the 2019 earnings outlook.
FILE PHOTO: the Headquarters of the Finnish telecommunications networking company Nokia will be exhibited in Espoo, Finland on the 26th of July 2018. Lehtikuva/Mikko Stig via REUTERS/File Photo
Nokia reported in April-June underlying earnings per share of 0.05 euros, compared with an average forecast of $ 0.03 eur in Refinitiv poll.
The company said that in the second quarter, with revenue rising by 7% a year earlier to 5.69 billion euros ($6.34 billion), helped by growth in North America.
The equipment-maker of the fourth quarter sales beat analysts ‘ average forecast of 5.43 billion euros.
In the telecom and networking industry is facing slowdown in demand, as the 4G network revenue, which reached a peak in the middle of the decade, however, a new cycle of network upgrades that seem to be kicking in, if the demand for the 5G technology will increase.
Nokia maintained its outlook for full-year earnings-per-share of between 0.25-0.29 euro 2020, with EPS of 0.37-0.42 euro. Analysts on average forecast stands at 0.23 euros by 2019, and to 0.36 euros by 2020, according to the Refinitiv of the data.
The Finnish company said that it now expected a slight growth of the market in 2019, while its previous forecast was based on a level of the market.
Nokia has sweden’s Ericsson and China’s Huawei as its main competitors and some analysts say the Nordic companies to be able to take advantage of the difficulties of the Chinese group by Washington, has accused Huawei of activities contrary to the national security, for the payment of Huawei denies it.
“Some of the customers to review their suppliers, and in the light of the concerns about safety and security, and the creation of a short-term basis to invest in the long-term benefits,” Nokia said.
Last week, arch-rival Ericsson said that the company is expected to be a struggle to get new contracts to get the profit margins up in the second half of the year.
The competitive intensity may increase in some accounts, such as some of the competitors in order to find the proportion of it in the early stages of 5G,” Nokia added.
Reporting by Tarmo Virki; Editing by Uttaresh.V, and Sherry Jacob-Phillips