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Nokia (NOK) Provides Detailed Plans for Business Turnaround

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On its Capital Markets Day, Nokia Corporation (NOK - Free Report) provided deep insights into long-term key market trends. The Finland-based company shared detailed plans for each of its business segments and its financial outlook.

Nokia is reorganizing itself to deliver profitable and sustainable growth while scaling up its business to lead in an increasingly digitized world. The company aims to deliver a double-digit operating margin in 2023.

Nokia expects several major trends to impact the industry over the next few years. These include 5G and related technologies, which will help create new opportunities for communications service providers and enterprises. Fiber-to-the-home and optimized transport technologies will deliver a seamless experience for consumers at homes and in workplaces.

To better meet customer needs, Nokia has created four business groups — Mobile Networks, Network Infrastructure, Cloud and Network Services, and Nokia Technologies. Each of these businesses aims to grow market share and margins through technology leadership. Nokia provides bring best-in-class products, services and connectivity solutions that allow its customers to deliver better performance.

Nokia is focused on technology leadership and is implementing the new operating model to reduce complexity and increase accountability. It aims to secure full portfolio competitiveness in Mobile Networks and restructure its cost base. Nokia’s total estimated addressable market is expected to witness a CAGR of almost 1% from 2020 to 2023.

Beginning 2022, the company aims to grow margins through greater technology leadership, digitization of operations and seizing emerging opportunities. It intends to drive growth in new use cases and business models, including enterprise and private wireless to grow faster than the market.

Nokia has reiterated its financial outlook for 2021. The company has also provided outlook for 2023. For 2021, it expects net sales between €20.6 billion and €21.8 billion. The operating margin is anticipated between 7% and 10%. ROIC is estimated in the 10-15% range. In 2023, Nokia anticipates net sales to grow faster than the market. Operating margin is projected between 10% and 13%. ROIC is likely to be in the band of 15-20%.

Nokia’s shares have gained 67.2% in the past year compared with 84.9% growth of the industry.



The stock currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader industry are Aviat Networks (AVNW - Free Report) , Plantronics and Ubiquiti (UI - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Aviat Networks delivered a trailing four-quarter earnings surprise of 61.7%, on average.

Plantronics delivered a trailing four-quarter earnings surprise of 560.4%, on average.

Ubiquiti delivered a trailing four-quarter earnings surprise of 37.1%, on average.

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