Nokia Earnings: Quarter Couldn’t Have Been Much Worse; Management Expects a Rebound

Though they’re tough to find and instill little confidence, here are the positives we see following Nokia’s third-quarter results: the company did not further reduce its 2023 guidance after doing so last quarter, implying a big sales bounceback in the fourth quarter; management expects free cash flow to go positive in the fourth quarter after it has been depressed by working capital fluctuations the past three quarters; and the terrible operating results are not company-specific. Peer Ericsson’s business has also been under pressure, and other companies that rely on U.S. wireless carrier spending have seen slowdowns. Industrywide, we expect sales growth to return in 2024.