Telecommunications | Profit warning from Nokia due to prolonged patent disputes

Network devices manufacturer Nokia announces that it will not reach its profitability target this year.

The earnings warning is due to the company’s failure to negotiate new patent licensing agreements with Chinese mobile phone manufacturers Oppo and Vivo.

The previous earnings warning was given by Nokia in July.

Nokia estimates that the settlement of the negotiations will move to next year and thus benefit the result of 2024.

“Nokia has negotiated closely with various parties and courts around the world have supported Nokia’s position, but the company considers defending the value of the patent portfolio more important than reaching a solution by a certain deadline,” the release says.

Negotiations due to the prolongation and the weakness of the market, the company estimates its turnover, operating profit percentage measuring profitability and free cash flow to be weaker than expected this year.

“As the fiscal year 2023 is still in progress, Nokia cannot provide preliminary information on its financial results. The company will publish its interim report for the last quarter and its full-year 2023 financial results on January 25, 2024.”

Back in October, Nokia estimated that this year’s turnover would have been 23.2–24.6 billion euros, operating profit percentage 11.5–13 and free cash flow 20–50 percent of comparable operating profit.

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Barack
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