Nokia slashes guidance as sales hit by customers cutting back
Nokia has slashed its guidance for the rest of the year with net sales now expected to be between £19.84bn -£21bn (€23.2bn- €24.6bn) as the mobile phone maker feels the impact of a slowdown in consumer spending.
The telecommunications giant said that it was also lowering its operating margin range outlook – the percentage of revenue that is left once a company accounts for costs of goods sold and expenses – to between 11.5 per cent to 13 per cent.
It previously predicted it to be between 11.5 per cent to 14 per cent.
Nokia attributed the change to customer spending plans being “increasingly impacted” by high inflation and rising interest rates along with some of its projects now slipping to 2024, especially in its North America market.
“There is also inventory normalisation happening at customers after the supply chain challenges of the past two years,” it added.
As a result Nokia said it expects to report net sales of approximately €5.7bn (£4.8bn) in the second quarter, which are flat on a year to year basis.
Nokia said: “As it progresses through this period of uncertainty Nokia will continue to take measures to ensure it remains on track towards its long-term targets of growing faster than the market and delivering a comparable operating margin of at least 14 per cent.”