Nokia posts slump in Q4 profit, announces €600m buyback

Nokia shares surged on Thursday as it posted a slump in fourth-quarter sales and profit but said there were signs of stabilisation in the market and announced plans for a €600m share buyback programme.

Fourth-quarter net profit fell to €568m from €929m in the same period a year earlier, with net sales down 23% to €5.7bn.

President and chief executive Pekka Lundmark said: "In 2023 we saw a meaningful shift in customer behaviour impacting our industry driven by the macro-economic environment and high interest rates along with customer inventory digestion."

On a brighter note, however, the company also said that while the fourth-quarter environment remained challenging, there are now signs of stabilisation with improving order trends.

It also announced plans for €600m share buyback programme in the next two years.

"Looking ahead, we expect the challenging environment of 2023 to continue during the first half of 2024, particularly in the first quarter. However, we are now starting to see some green shoots on the horizon, with improving order intake for Network Infrastructure and some of the specific deals we have won," said Lundmark.

"This is expected to drive a strong improvement in Network Infrastructure net sales growth in the second half of 2024 which we believe, even with a challenging first half, will drive solid growth for the full year."

At 1340 GMT, the shares were up 9.4% at €3.44.