Nokia Corp (NYSE:NOK) stock experienced a rebound on Friday following a selloff on Thursday, despite the company’s quarterly report failing to meet expectations.
The Finnish telecom company reported a decline in net sales of 8% to $4.76 billion in the fiscal third quarter, falling short of the consensus estimate of $5.34 billion. The drop in revenue was attributed to weakness in the Indian market.
Nokia’s market share in North America also declined after losing contracts with Verizon Communications Inc (NYSE:VZ) and AT&T Inc (NYSE:T).
CEO Pekka Lundmark mentioned that the telecom sector remains a limited growth market for Nokia, prompting the company to shift its focus to the data center and defense sectors for growth opportunities.
Lundmark also highlighted a demand rebound in India, driven by the Vodafone Idea deal and a potential contract with Bharti Airtel.
Additionally, Nokia has implemented cost-cutting measures by reducing around 2,000 employees in Greater China and 350 jobs across Europe. These actions are part of Nokia’s plan to eliminate up to 14,000 jobs in order to save 800 million euros to 1.2 billion euros by 2026.
U.S. sanctions on Chinese smartphone giant Huawei Technologies Co have impacted Nokia’s presence in the Chinese market, which accounted for 27% of its sales in 2019. Greater China represented 6% of Nokia’s sales in the current quarter.
Chinese operators responded to the U.S. embargo by turning away from European equipment, leading Nokia to sell part of a joint venture with Huawei in China in 2024.
Despite previous reports suggesting Nokia’s intention to replace Lundmark due to a lack of revenue growth, the company has expressed confidence in his leadership.
As of the latest update, NOK stock is up 9.01% at $4.73.
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