Nokia -Payments to the 5G frequency

nokia, 5g, frequency, new technologies, telephones, telephone, calling, mobile internet

Nokia Oyj shares have fallen the most since 1991. After the Finnish company lowered its outlook and suspended its dividend, saying that defense expenses of competitors delayed the growth of profits from 5G cellular networks. The equipment vendor lowered both profit and margin expectations for this year and next year and said he would not pay dividends for the third and fourth quarters of fiscal year 2018. Nokia does not expect a return of profits until 2021, about a year later than before . Inventories fell by 24% at the opening in Helsinki. "Some of the threats we have previously identified in relation to the initial 5G phase are now becoming a fact," said CEO Rajeev Suri in a statement, pointing to price competition and high product costs. He said Nokia would now spend more on developing 5G products and reducing their costs. "We expect to be able to gradually alleviate these problems over the next year." Nokia shares have been falling the most since 1991 in intra-day trading Adjusted earnings per share for 2019. It is currently forecast at 0.18 euros to 0.24 euros, in the range from 0.25 euros to 0.29 euros. Daniel Djurberg, an analyst at Handelsbanken in Stockholm, called the reduction in guidelines for 2019 as "Huge" and characterized the decline for 2020. As dramatic, in a research note. Nokia has reduced its ENP expectations for next year to 0.20 euros to 0.30 euros, from a previous range of 0.37 euros to 0.42 euros. Nokia has turned to the action drama at Hefty Outlook Cut: Handelsbanken Limited perspectives were not completely unexpected - analysts included the potential in their conservative estimates - but the size of the reduction may surprise investors. Before the update in the third quarter, analysts predict that in 2019 the company will adjust the adjusted earnings per share by EUR 0.23. The results for the third quarter exceeded analysts' expectations in the period which the company marked as weak. Suri said price competition is particularly strong in China and meant uncertainty about the merger of telephone operators in North America - a reference to the planned connection between Sprint Corp. and T-Mobile US Inc. the connection may reduce the demand for 5G equipment, assuming they can benefit from network overlap. Nokia feels the heat of rivals Ericsson AB and Huawei Technologies Co., who are fighting for dominance in the mobile network market. Ericsson is keen to accept less profitable contracts to distract most of the market from competitors. And while some telephone operators are checking how many companies are doing with Huawei due to security concerns from some governments, this is putting additional pressure on Nokia to spend more on products because it competes with Ericsson from Stockholm to get all the benefits. "We have a problem with higher product costs, which is not particularly surprising at this early stage of the new 5G radio cycle," Suri said during a conversation with journalists. "These costs usually fall significantly as the scale increases and the work on cost optimization progresses." Ericsson's network activity has returned to form in recent years, as the company has increased spending on R&D 5G while trying to reduce other costs. After the Thursday announcement, it seems that Nokia is following in the footsteps of its Swedish rival, while hoping that its broader, so-called comprehensive product range will attract more network technology customers. "Although I am not completely satisfied with our current results, I am convinced that our strategy remains the right one," said Suri. Nokia said it plans to resume dividend payments when its net cash position increases to around EUR 2 billion. It expects net cash to reach around 1.5 billion euros by the end of 2019. - With the help of Jonas Cho Walsgard and Kati Pohjanpalo (Updates involving the first and second paragraphs)

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