Nokia Q1 beats expectations on higher 5G gear demand

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Quarterly revenue rose 3% to 5.08 billion euros ($6.16 billion), beating a consensus figure of 4.72 billion, Refinitiv data showed.

“We expect our typical quarterly earnings seasonality to be less pronounced in 2021,” Chief Executive Pekka Lundmark said in a statement, adding that sales growth was strong across its network infrastructure business.

After taking over the top job last year, Lundmark has streamlined the company’s operation, cut jobs, and made changes to recover from product missteps under the company’s previous management that hurt its 5G ambitions and weighed on its shares.

Nokia and its Nordic rival Ericsson (BS:ERICAs) have been gaining more customers as more telecom operators start rolling out 5G networks and China’s Huawei is increasingly shunned by several governments over security concerns.

Nokia forecast full year net sales of between 20.6 billion euros to 21.8 billion euros, largely in line with expectations of 21.28 billion euros.

Quarterly profit rose to 5 euro cents per share while adjusted profit was 7 euro cents per share. Analysts had expected 1 euro cents, according to IBES data from Refinitiv.

Its comparable gross margin rose to 38.2% from 36.4% a year earlier, mainly driven by 5G growth.

Rival Ericsson last week reported quarterly core earnings above market estimates, helped by higher margins and 5G rollout in China.