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Cost Reductions Help Nokia Record Surprise Rise in Profits but no Dividends Declared

Cost reductions helped Nokia to a surprise hike in its October-December underlying profit Thursday. However, the Finnish telecom network gear maker flagged severe events ahead and said it could not recommend a dividend for 2019.Cost Reductions Help Nokia Record Surprise Rise in Profits but no Dividends Declared

Nokia cut its scope in October and stopped dividend payouts, blaming a need to arrange investments in 5G and knocking over a fifth from its value.

However, on Thursday, Nokia stated its underlying profits for Q4 ending in December surged to 0.15 euros a share from 0.13 euros per share a year earlier, above the 0.13 euros consensus in a Refinitiv poll.

In a declaration, Nokia repeated its estimate for this year’s underlying earnings per share of 0.20 euros to 0.30 euros, in comparison with 0.22 euros last year.

The group stated its board wouldn’t propose a dividend for 2019 as it would reach a 2 billion euro cash position it sees enough for profit distribution only through Q4. Analysts had been anticipating a dividend of 0.11 euros, based on a Refinitiv ballot.

Nokia, which competes with Ericsson and Huawei for new 5G network contracts, stated it expects intense competition to continue this year, as some competitors seek to seize market share in the early phases of 5G.

Suri has been cautious about the Chinese market for some quarters, and Nokia excluded China from its outlook.

Sales in Greater China fell 25% in the fourth quarter to 469 million euros.

Group sales had been flat at 6.9 billion euros as drops in China and North America were offset by progress in Asia-Pacific.

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