Lundmark Keeps Optimism Despite Mobile Woes in Q3

In the third quarter of 2024, the decline in Nokia's Mobile Networks segment contributed heavily to an overall 8% drop in net sales. Despite that, CEO Pekka Lundmark is optimistic the vendor is turning the corner across many parts of its business despite continued market weakness.

In a 3Q24 earnings statement, Lundmark said its optimism was fueled by a return to sales growth in Network Infrastructure and Fixed Networks, with robust order intake in the latter. Overall net sales hit €4.3 billion, down from €4.7 billion year-on-year. However net profit for the period was up 32% to €175 million, as the company stated it remains disciplined on price while still winning deals and progressing on cost reduction efforts.

Net sales in the Mobile Networks segment dropped 19% to €1.7 billion, mainly driven by lower demand in India. The company is however seeing a recovery in the market after it secured a big contract from Vodafone Idea and shortly before the earnings release Reuters reported it is also in talks with Bharti Airtel over a multi-billion-dollar contract.

Lundmark acknowledged the market dynamics are challenging but added it has secured several important deals in the quarter and it remains confident in its competitive position and improving its gross margin. He also pointed to excellent momentum in Cloud and Network Services despite a 5% dip in net sales, highlighting progress in network automation, cloudification, and enabling network APIs.

“Across Nokia, we are investing to create new growth opportunities outside of our traditional communications service provider market,” said Lundmark. CEO added the company saw opportunities to bring 5G to the defense market and opportunities in the private wireless network segment.