Nokia profit up despite pandemic as new CEO takes over

No major punches landed at big tech hearing

FOX Business’ Susan Li reports on highlights from Wednesday’s big tech hearing in front of Congress and what to expect from Thursday earnings reports from Apple, Amazon, Alphabet and Facebook.

Nokia has reported better than expected second-quarter earnings on the back of improved margins for telecoms equipment and software despite the coronavirus crisis causing a substantial drop in revenue.

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The Espoo, Finland-based maker of new-generation 5G mobile and other networks said Friday that its net profit for the April-June period was up 22 percent at 316 million euros ($376 million). Sales were down 11 percent at 5.1 billion euros.

Shares rose 10 percent in Europe.

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CEO Rajeev Suri said in a statement that the majority of the drop in revenue was "the result of COVID-19 as well as a sharp decline in China based on the prudent approach we have taken in that market.”

Nokia estimated that the COVID-19 crisis hurt its net sales by about 300 million euros in the second quarter and about 500 million euros in the first half of the year.

“We expect that the majority of sales missed in the (second) quarter due to COVID-19 will shift to future periods,” Suri said.

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Suri said that Nokia has now concluded 83 commercial deals for 5G, the new network technology that allows ultra-fast downloading speeds among other things. Along with China’s Huawei and Sweden’s Ericsson, Nokia is one of the three main providers of 5G networks. Huawei is at the center of a U.S.-China dispute over technology, with the Trump administration saying it can help the Chinese government spy on people, a claim the company denies.

Friday marked the last day as a CEO for Suri, a Nokia veteran with 25 years in service and the head of the company since 2014, as his appointed successor Pekka Lundmark takes over on Aug. 1.

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Lundmark, 56, is the former CEO of the Finnish energy group Fortum who has earlier worked at Nokia in various executive positions between 1990 and 2000.

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In May, Nokia’s shareholders approved the appointment of Sari Baldauf, who also has an extensive Nokia background, as the company’s new chair.

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