Finnish telecommunication company, Nokia Corp. noted a loss in the 2024 fourth-quarter figures compared to the previous year's profit, hit by weak net sales. The network company foresees continuous challenging circumstances, particularly in the upcoming quarter. However, the board has proposed a dividend authorization of 0.13 euros per share and kickstarted a two-year buyback program worth 600 million euros. This announcement saw the company's shares rise by over 7% in Paris as well as in pre-market activity on the New York Stock Exchange.
Nokia also reported that its board has approved a new long-term incentive plan based on shares, as well as an employee share purchase plan, with the award grant period running until December 31, 2026. This plan allows Nokia to grant both performance and restricted share awards to eligible executives and employees from 2024-2026.
Reflecting on its latest quarter, the company acknowledged a challenging environment. Still, CEO Pekka Lundmark highlighted signs of stabilization with improving order trends. He expressed optimism spurred by incoming orders for Network Infrastructure and specific deals the company has secured. Lundmark believes that despite a difficult first half, these developments would drive growth throughout the year.
For 2024, Nokia predicts an operating profit between 2.3 billion and 2.9 billion euros, compared to 2.38 billion euros in 2023. The forecasts for net sales growth in Network Infrastructure range from 2% to 8%; however, Mobile Networks sales could decline by 10% to 15%. Sales in Cloud and Network Services could vary between a 2% loss and a 3% gain.
Further projections for 2026 include faster sales growth than the market and an operating margin of at least 13%. Nokia believes its previous target of a minimum of 14% operating margin remains achievable in the long term.
The Board also decided on a dividend distribution of 0.03 euro per share, with the dividend record date on January 30 and payment scheduled for February 8.
For the fourth quarter, Nokia reported a loss of 33 million euros against last year's profit of 3.15 billion euros. Loss per share was 0.01 euro, in contrast to a profit of 0.56 euro a year ago. This discrepancy was due to non-cash remeasurement of deferred tax assets caused by an operational model alteration.
The final comparable profit for the period totalled 568 million euros, which decreased from the previous year's 929 million euros. The corresponding earnings per share were 0.10 euro and 0.16 euro respectively. The operating margin dropped by 220 basis points to 9.6%, with the comparative operating margin shrinking by 70 basis points to 14.8%.
Net sales fell by 23% to 5.71 billion euros from last year's 7.45 billion euros, amid ongoing macroeconomic uncertainty affecting operator spending. Nokia witnessed a decrease in sales across multiple departments: Network Infrastructure by 26%, Mobile Networks by 17%, Cloud and Network Services by 8%, and Nokia Technologies by 63%.
In trading updates, Nokia shares in Finland are trading at 3.37 euros, up 7.05%, with shares in the pre-market activity on NYSE trading at $3.67, representing a 7.62% increase.
