$NOK This is why Nokia shares soared
Investors welcomed the company's growth, dealing with networking, through 5G.
Nokia shares jumped by 11% on Thursday after, how a telecommunications equipment manufacturer posted surprisingly strong first quarter results.
Nokia's net sales are up by 3% on an annualized basis – and on 9% excluding currency fluctuations – to 5,1 billion euros (6,2 billion dollars). This growth was driven in part by 5G-related advances in network infrastructure and Nokia mobile networks..
Corporate sales were particularly strong. The addition of new customers helped to increase revenue in this key segment by 14% (18% in constant currency).
Furthermore, Nokia's profitability improved as, how its sales structure shifted towards 5G products with higher margins, and its efficiency initiatives are supported by. Nokia's gross margin increased by 2,6 percentage points to 37,9%, while its operating margin was 8,5% compared to negative 1,5% a year earlier.
Overall, Nokia's comparable net income increased by more than 11 times and made 375 millions of euros (455 million dollars). This was well above analysts' estimates of adjusted earnings in 90 millions of euros.
Management retained its annual financial forecast for revenue from 20,6 to 21,8 billion euros (from 25 to 26,4 billion dollars). But CEO Pekka Lundmark said, that Nokia's strong performance in the first quarter increases the likelihood of reaching the upper limit of its operating margin target from 7% to 10%.
“Today's results show, that we are on the right track to implement our three-step plan to achieve sustainable, profitable growth and technological leadership ", – said Lundmark.