Nokia Shares Tank as 5G Costs Hit Q1 Outlook

Nokia shares had one of their worst days ever on 24 October after the Finnish telecom equipment supplier reduced its profit outlook to reflect the costs of developing 5G products. The stock fell more than 24% to $3.87 — the largest drop since 1991 — as Nokia also disclosed in its third-quarter earnings release that it would not be paying a dividend for that quarter and the fourth quarter in part to “guarantee Nokia’s ability to increase 5G investments.” The company is now expecting first-quarter margins to negative 3%, below its previous forecast of between minus 2% and plus 2%. “Some of the risks that we flagged previously related to the initial phase of 5G are now materializing,” Nokia CEO Rajeev Suri said, noting that its third-quarter gross margin was impacted by the “high cost level associated with our first generation 5G products.”

- CFO -



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