Finnish telecommunications giant Nokia posted this morning their financial results for the third quarter of 2019 and Q1-Q3 period of 2019. The report is dominated by the announcement of pausing of dividend payments and lowering the outlook for 2019 and 2020.
In Q3 2019, Nokia posted €5.686 in revenue, which is up 4% compared to Q3 2018. All segements (Networks, Software and Technologies) posted year-on-year growth during the period. The operating profit for the period was €264 million compared to operating loss of €54 million last year, with Nokia Software business posting a 108% operating profit growth compared to Q3 2018, while Technologies remained steady at 1% and Networks posted a decline in operating profits YoY of 28%.
For the investors the biggest announcements were that change in outlook and pausing of dividend payout. As Reuters points out, “Nokia now sees 2019 underlying earnings per share (EPS) at 0.18 euros to 0.24 euros and 2020 EPS at 0.20 euros to 0.30 euros. It had earlier forecast 2019 EPS at 0.25 to 0.29 euros, and 2020 EPS in the range of 0.37 to 0.42 euros.” The reason for lower outlook is tougher competition in 5G and the need of further investments to compete.
Nokia’s board decided not to distribute the third and fourth quarterly instalments of the dividend for the financial year 2018 in order to increase 5G investments, investments in areas of growth like software and strengthen cash position.