Nokia posts surprise quarterly profit rise on cost cuts

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© Reuters. FILE PHOTO: Telecommunication network company Nokia - Q2 2018 results© Reuters. FILE PHOTO: Telecommunication network company Nokia – Q2 2018 results

HELSINKI (Reuters) – Finnish telecom network equipment maker Nokia (HE:) reported on Thursday a surprise rise in October-December underlying profit, driven by cost cuts, and said most of its 2020 profit will be generated in the fourth quarter.

Nokia said October-December underlying earnings rose to 0.15 euros per share from 0.13 euros per share a year ago, beating the 0.13 euros consensus in a Refinitiv poll.

Nokia repeated its forecast for 2020 underlying earnings per share of 0.20 euros to 0.30 euros.

“Our expectation for seasonality in 2020 (is) to be similar to 2019, with the majority of operating profit and free cash flow to be generated in the fourth quarter,” Nokia said in a statement.

Nokia cut its outlook in October and halted dividend payouts, blaming it on its need to step up investments in 5G – news that knocked more than a fifth from its value.

Nokia, which battles with Ericsson (ST:) and Huawei for new 5G network deals, said it expects competitive intensity to continue at a high level in 2020, as some competitors seek to take share in the early stage of 5G.

Nokia said its board would not propose a dividend for 2019. Analysts were expecting a dividend of 0.11 euros, according to a Refinitiv poll.

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