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Nokia (NOK), Ericsson (ERIC) to Terminate Russia Operations

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Nokia Corporation (NOK - Free Report) and Ericsson (ERIC - Free Report) have decided to shut down their operations in Russia.  The decision was taken in the wake of an unprovoked attack on the sovereignty of Ukraine by Russian forces.

Nokia has around 2000 employees in Russia and is expected to close its operations in the country by the end of 2022. It will maintain its limited maintenance of critical networks in Russia and abide by its contractual and humanitarian obligations in the coming months.

Ericsson has suspended its business workings in Russia for an indefinite period. The company has around 400 employees and has decided to support them financially. It also recorded a $95 million provision in the first half of 2022 related to the impairment of assets and other extraordinary costs made in association with the move.

Nokia is facing risks arising from macroeconomic, industry and competitive factors. Its Mobile Networks business is facing strong competition as more and more companies plan to take a substantial share in the early stage of 5G.
Nokia’s international presence exposes it to economic and political disruptions, which affect profits. It is also adversely impacted by transportation capacity problems and local disruptive events. The company’s cost-saving program plays a crucial role in the reduction of support function costs and improvement of its research and development productivity.

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Ericsson and Nokia’s complete exit from Russia indicates that the local mobile operators such as MTS and Tele2 will be more dependent on Chinese companies such as ZTE and Huawei. Ericsson is experiencing a decline in sales in the Middle East and Africa due to unfavourable macroeconomic conditions. The Managed Service segment is facing pressure due to a fall in demand under certain contracts and contract rescoping. Advanced business models in Internet Service and mobile broadband are also adversely impacting the company.

Nokia has lost 19.3% in the past year compared with the industry’s decline of 12.5%. Nokia currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Vipshop Holdings Limited (VIPS - Free Report) is a better-ranked stock in the broader Zacks Computer and Technology sector, sporting a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised upward by 13.6%.

Vipshop delivered a trailing four-quarter earnings surprise of 10.5%, on average. It has lost 24.2 % in the past year.
Globant S.A. (GLOB - Free Report) sports a Zacks Rank #1. The consensus estimate for current-year earnings has been revised upward by 0.6% over the past seven days.

Globant delivered a trailing four-quarter earnings surprise of 3.2%, on average. It has lost 34.5% in the past year.

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