Rockier Nokia

24 October 2019 By Ed Cropley Follow @edwardcropley

The phone-kit maker’s shares dropped by a fifth as it slashed profit forecasts and cancelled its dividend. Increased competition for 5G networks suggests its Chinese rival is cutting prices. But if Nokia can’t cash in on Donald Trump’s anti-China push, the future looks grim.

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Nokia on Oct. 24 cut its profit outlook for 2019 and 2020, saying its margins were coming under pressure from rivals in the business of building 5G telecom networks.

The Finnish telecom equipment maker cut its forecast for underlying earnings per share in 2019 to 0.18 euros to 0.24 euros from 0.25 euros to 0.29 euros previously. It also lowered its 2020 EPS forecast to 0.20 euros to 0.30 euros, from 0.37 euros to 0.42 euros.

The company also cut its 2019 operating margin forecast to 8.5% from the 12-16% previously expected and said it was suspending quarterly dividend payments to increase its investments in 5G.

Nokia shares fell as much as 24% to 3.6 euros on the morning of Oct. 24, their lowest level in six years.

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