The logo of telecommunications giant Nokia before the company’s press conference in Espoo, Finland.
Markku Ulander /Lehtikuva/AFP via Getty Images
Nokia on Thursday reinstated its quarterly dividend, launched a share buyback program and introduced new, long-term goals as the Finnish telecom equipment maker starts to see its turnaround strategy pay off.
The company said annual revenue this year should be €22.6 billion ($25.5 billion) to €23.8 billion ($26.8 billion), up from €22.2 billion in 2021.
Nokia (ticker: NOK) also set a new long-term target for operating margins of at least 14%, replacing its earlier 2023 target of between 11% and 13%.
“Nokia enters 2022 in a strong position with improved margins, faster-than-expected strategy execution and a high order backlog, although the global supply chain situation remains tight,” Chief Executive Pekka Lundmark said in a statement.
“We see opportunities in the 5G rollout and growing enterprise market,” he added.
Fourth-quarter revenue fell 2% to €6.41 billion from the same period in 2020, missing expectations of €6.51 billion, according to analysts polled by FactSet.
Nokia’s U.S.-listed stock dropped 4.02% in premarket on Thursday. In Helsinki trading, Nokia (ticker: NOKIA.Finland) shares were down 3.18%
“While we view positively the level of margin ambition at over 14%, we think the time scale of 3-5 years is disappointing relative to rising expectations,” Citi analysts said in a note on Thursday.
“We understand management’s likely aim of under-promising and over-delivering (in which Nokia has done well under the current management team), but anticipate a cautious initial response to today’s long-term guidance,” the analysts added.
Nokia also proposed a dividend, suspended since 2019, of €0.08 per share and launched a two-year, €600 million share buyback program.
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