Nokia drops 9% on weak preliminary sales, guidance cut

Scandinavian telecom giant Nokia (HE:) (NYSE:) reported softer-than-expected preliminary results for its second quarter, pushing its shares over 9% lower in pre-market Friday trading.

Nokia expects Q2 sales of €5.7 billion ($6.4 billion), below the consensus of €6B. Comparable operating profit margin is seen at 11%, the company said.

As a result, the company now expects full-year sales of €23.2-24.6B, below the previously expected €24.6-26.2B. The comparable operating margin range outlook is narrowed to 11.5-13% from 11.5-14% previously.

“The changes are related to Nokia’s Network Infrastructure and Mobile Networks business groups,” the company said in an update.

“The weaker demand outlook in the second half is due to both the macro-economic environment and customers’ inventory digestion. Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 – notably in North America. There is also inventory normalization happening at customers after the supply chain challenges of the past two years.”

The company will report full earnings on July 20.