Nokia saw its sales slip below market expectations as recovery proved slower than expected amid a decline in mobile networks, primarily in India, and the disposals in cloud and network services. The Finnish telecom giant's shares dipped 5% in morning trade as it reiterated its fiscal 2024 comparable operating profit outlook at between 2.3 billion euros and 2.9 billion euros, but noted that it is tracking within the bottom half of the given range. Nokia also confirmed free cash flow conversion from a comparable operating profit outlook in the range of 30% to 60%, with plans to boost margins further beyond 2026 and aim for a comparable operating margin of over 13% and a free cash flow conversion of between 55% and 85%. The target were affirmed as it posted an attributable profit of 169 million euros in the three months ending Sept.
30, up from 139 million euros in the prior year but significantly below the Visible Alpha-compiled consensus estimate of 336.1 million euros. The profit boost was supported by the company's increased gross margin, driven by a combination of "improved product mix, regional mix and actions to reduce product cost." Meanwhile, net sales fell for the third consecutive quarter to 4.33 billion euros from 4.71 billion euros previously, missing the analyst expectations of 4.80 billion euros.
Nokia noted that despite the slow recovery, fixed networks and network infrastructure divisions returned to net sales growth, while the latter saw a significant increase in order intake and a growing order backlog during the quarter. "Across Nokia we are investing to create new growth opportunities outside of our traditional communications service provider market.
We see a significant opportunity to expand our presence in the data center market and are investing to broaden our product portfolio in IP Networks to better address this. Our pending acquisition of Infinera will also bolster our Optical Networks exposure to this market and accelerate our growth opportunities," Lundmark added. Price: $3.86, Change: $-0.19, Percent Change: -4.58%.