Nokia has revised its full-year net sales guidance and narrowed its operating margin outlook due to weaker demand in its network infrastructure and mobile networks businesses. This shift is a result of the challenging macroeconomic environment and the need for customers to work through excess inventory.
Sales Projection
Nokia now expects sales to range between 23.2 billion euros and 24.6 billion euros ($26.05 billion-$27.62 billion), compared to the previous projection of EUR24.6 billion to EUR26.2 billion.
Operating Margin
The company has also revised its operating margin forecast, which is now expected to be between 11.5% and 13%, down from the previous range of 11.5% to 14%.
Market Impact
According to Nokia, customer spending plans have been increasingly influenced by high inflation and rising interest rates. Additionally, certain projects have been delayed until 2024, particularly in North America. The company also mentioned that customers are currently in the process of normalizing inventory levels after facing supply chain challenges over the past two years.
Q2 Preliminary Results
Ahead of the release of its second-quarter earnings on July 20, Nokia reported preliminary net sales of approximately EUR5.7 billion for the three-month period. The company also disclosed a comparable operating margin of approximately 11%, with operating profit benefitting from EUR80 million in catch-up payments in its technologies unit.
Long-Term Targets
Nokia remains committed to achieving its long-term targets, which include outpacing market growth and delivering a comparable operating margin of at least 14%. The company will continue implementing measures to ensure it stays on track with these objectives.
