Stock profits amid economic downturn?
Nokia Announces Surprising Revenue Jump and New Partnership with Samsung
times are tough in the tech industry, with giants like Microsoft and Alphabet laying off thousands due to economic woes. But not all companies are feeling the pinch. Nokia, the telecom giant from Finland, has bucked the trend, reporting a staggering 30% increase in operating profit for Q4 2022, amounting to a whopping $1.3 billion. Analysts had predicted revenues of around $1 billion, making this a pleasant surprise for shareholders.
Nokia's CEO, Pekka Lundmark, is even more optimistic, predicting growth for the company in 2023. What's behind this growth? Well, a significant factor is the expansion of the 5G network in India. In an interview, Lundmark highlighted that the much-feared chip shortages in the semiconductor industry are no longer a major issue. Delivery times are still longer than usual, but booming demand for 5G technology is helping Nokia stay afloat.
Another noteworthy development is Nokia's new collaboration with South Korean electronics giant Samsung. This partnership allows Samsung to use Nokia's cutting-edge 5G technology in its devices, in exchange for licensing fees for Nokia. Lundmark is tight-lipped about the financial details of the deal, but it's clear that this agreement marks a strategic alliance between the two companies.
As a result of this partnership and strong demand for 5G technology, Nokia expects its EBIT margin for 2023 to be between 11.5% and 14%. After a margin of 12.5% in 2022, this is impressive growth. Following the positive news, Nokia's shares rose by over 7% at the Helsinki Stock Exchange on Thursday.
By the way, did you hear about Elon Musk's tweets revealing how a letter from Cathie Wood altered Tesla's fate? But we'll save that for another time. For now, let's bask in the glow of Nokia's success. Go Nokia, keep surprising us!
The new partnership between Nokia and Samsung, where Samsung utilizes Nokia's advanced 5G technology in exchange for licensing fees, is a strategic move in the technology-driven business landscape. This alliance, coupled with the strong demand for 5G technology, has contributed to Nokia's expected EBIT margin growth for 2023.
