Nokia's sales down, profit ups in 2020

Finnish telecom giant Nokia on Thursday reported decreased sales but improved operating profit for the full year of 2020, reported Xinhua.

A Nokia press release showed that the company's net sales stood at 6.57 billion euros in the fourth quarter (Q4) of 2020, down by five percent from 6.90 billion euros in Q4 2019.

For the full year of 2020, Nokia saw its sales reach 21.87 billion euros, down by six percent from 23.34 billion euros in 2019.

Nokia's operating profit in Q4 2020 declined by four percent to 1.09 billion euros, compared with 1.13 billion euros in Q4 2019. Its operating profit in the full year of 2020 reached 2.11 billion euros, six percent higher than 2.00 billion euros in the previous year.

Pekka Lundmark, president and chief executive officer (CEO) of Nokia, said that the company saw healthy gross margin and operating margin performance for both Q4 and the full year of 2020, as a result of increased competitive edge, better product development and the focus of sales on North America, where the sales margins are higher.

"These are encouraging results," said Lundmark, though adding that "we expect 2021 to be challenging, a year of transition, with meaningful headwinds due to market share loss and price erosion in North America."

Mikael Rautanen, CEO of Inderes, a Finnish financial company offering business and industry analysis, told the local newspaper Kauppalehti that Nokia's loss of market shares in 5G is alarming and it can only be restored through a better competitive edge that Nokia now tries to reach.