Why is Nokia Corp ADR (NOK) Stock down?
Shares of Nokia Corporation Sponsored (NOK) dropped by 5.31% from $3.39 to $3.21 in the trading on Thursday, October 19, 2023. The reasons why NOK stock down include:
- Weak Q3 Sales: Nokia's third-quarter sales experienced a sharp 20% year-over-year decrease, amounting to €5 billion. This decline was primarily attributed to higher interest rates and an uncertain macroeconomic environment, which led to reduced spending by operators. Sales in the Mobile Networks business segment dropped by 24%, particularly impacted by North American markets, where consumers reduced inventories to preserve cash flows. The company also faced a slowdown in the growth of its 5G deployments in India, which couldn't offset the North American decline. Sales in the Network Infrastructure business segment fell by 18%.
- Job Cut Announcement: Nokia announced plans to cut up to 14,000 jobs as part of its cost-cutting efforts. This decision was prompted by the weak demand for 5G equipment and the challenging market conditions. Nokia's CEO, Pekka Lundmark, stated that while it was a difficult choice, it was necessary to align with market uncertainty and ensure the company's long-term profitability and competitiveness. Nokia aims to achieve savings ranging from €800 million ($842 million) to €1.2 billion by 2026 through these measures. The company expects to reduce its workforce to between 72,000 and 77,000 employees, down from 86,000, representing a potential 16% job reduction at the high end of the range.
Shares of comminucation networking company Nokia (NOK) dropped 8.51% on Friday after the company consequently lowered its full-year net-sales guidance to 23.2 billion from 24.6 billion euros - a decrease of 6% from the high points of the guidance ranges.