Nokia to lift full-year guidance, shares jump

Nokia expects to up its guidance for the full-year, the Finnish firm said on Tuesday, despite potential headwinds in the second half.

The telecoms equipment manufacturer said it had seen "continued strength" across the business during the second quarter, "improving its expectations for the full year". As a result, it "expects to revise upwards its prior outlook ranges for 2021".

The current forecast is for net sales of between €20.6bn and €21.8bn, a comparable operating margin between 7% and 10% and positive free cash flow.

Pekka Lundmark, chief executive, said: "We are progressing well with our three-phased plan to achieve sustainable, profitable growth and technology leadership. Our first half performance has shown evidence of this in good cost control and also benefited from strength in a number of our end markets.

"We continue to expect some headwinds in the second half, but our performance in the first half provides a good foundation for the future year."

Shares in the firm jumped 7% on the update.

Janardan Menon, analyst at Liberum, said: "This statement is entirely in-line with our own bullish expectations for the business. Our operating margin forecast for the year is already well ahead of Nokia’s guidance range of 7%-10%, with the company previously stating that it expects to be at the high end.

"There is evidence of stabilisation in their mobile networks business, with increased 5G contract momentum across the world. Specifically, we expect Nokia to benefit in the second half from AT&T’s C-band rollout, as well as increased deployments in Japan.”

Nokia said it updates its final forecasts on 29 July, when it is scheduled to post second quarter and interim numbers.