Nokia on Thursday beat quarterly operating profit expectations and forecast higher 2023 sales as the Finnish telecom equipment maker said it had been able to gain market share, benefitting from 5G roll-out in countries such as India.
“We are taking market share now,” Chief Executive Pekka Lundmark told Reuters, adding the growth was broad-based and calling India “the highlight of this story”.
Nokia (NYSE:NOK) shares opened up 5.8% in Helsinki.
Lundmark said Nokia saw another year of growth ahead in 2023, in sharp contrast with its main rival Ericsson (BS:ERICAs).
Ericsson had reported lower than expected fourth-quarter core earnings and said it expected a fall in margin in its Networks business to persist through the first half of 2023, citing weak sales of 5G equipment in markets such as the United States.
“I guess the reason is that we have a more optimistic view on the size of the Indian market,” Lundmark said, when asked about Nokia’s better outlook than its rival’s.
He added Nokia had also managed to diversify its customer base from network service providers to industrial customers who set up their own private 5G networks at power plants, utilities and mines among others.
“We estimate that the world economy is only 30% digitalized compared to what the full potential is and that is exactly what we are seeing in the enterprise business,” Lundmark said.
Nokia’s fourth-quarter comparable operating profit rose to 1.15 billion euros ($1.26 billion) from 908 million last year, beating the 924.6 million euro mean forecast of 10 analysts polled by Refinitiv.
“Looking forward to 2023, while we are mindful of the uncertain economic outlook, demand remains robust,” Lundmark said in a statement.
Nokia forecast full-year net sales of between 24.9 billion euros and 26.5 billion euros, which implies between 2% and 8% growth in constant currency. Analysts expect 25.5 billion euros.
Net sales grew 16% to 7.45 billion euros, beating estimates of 7.11 billion euros.
Apart from growing demand from business customers, the company also got big contracts from Indian telecom operators for the launch of 5G in that country.
Lundmark said the constraints on chip supplies had eased.