Nokia doesn’t expect to achieve its 2023 financial targets

Nokia said the number crunching behind its financial outlook for 2023 assumed the closure of outstanding license renewals in Nokia Technologies, and as of December 30 it no longer expected these negotiations to conclude before the end of the year. As such it’s net sales, comparable operating margin and free cash flow targets for the year won’t be met.

“While there have been intense negotiations between the relevant parties and courts around the world have found in Nokia’s favour, the company will prioritize protecting the value of its patent portfolio versus achieving certain timelines for resolution,” stated a release.

The firm will report its Q4 and full year 2023 financial results on 25 January. With regards to Q4 performance in its networks businesses – which includes Network Infrastructure, Mobile Networks, and Cloud and Network Services divisions – net sales ‘are expected to demonstrate a significant improvement sequentially.’

“The quarter has proved somewhat more challenging than expected given on-going customer spending constraint and the recently communicated customer purchasing decision. Profitability in Nokia’s networks businesses is however expected to remain solidly within the comparable operating margin assumptions the company had previously communicated.”

Early in December, Nokia was left out in the cold when US operator AT&T announced a $14 billion plan to deploy Open RAN with Ericsson as its lead supplier. At the time of our coverage of that story, Ericsson's shares were up 5.1%, while Nokia's were down 7.9%.

Following this, Nokia announced a strategy update which featured tweaks to its Mobile Networks and Cloud And Network Services business groups. The mobile unit ‘has begun to re-baseline its operations for resilience and profitability’, stated the release.