Nokia today took the unusual step of announcing that it plans to update its financial guidance upwards. The company said it is seeing continued strength in its business during its second quarter, which is improving its expectations for the full year 2021.
During its Q1 2021 earnings report, Nokia projected its net sales for the full year would be between €20.6 billion to €21.8 billion ($24.32 billion to $25.74 billion), and its operating margin would be between 7% to 10%.
Nokia now expects to boost this guidance, but it won’t reveal the new numbers until its Q2 2021 earnings report on July 29.
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During its Q1, Nokia CEO Pekka Lundmark said the company was doing well, but he wanted to maintain its current guidance until he saw how 2021 continued to develop.
For Q1 Lundmark said, “The standout was our network infrastructure business, which had a fantastic quarter.” The unit increased its net sales growth by 22% year over year. “This business group builds on strong technology leadership, and we see robust demand for its products,” said Lundmark.
The network infrastructure business includes fixed, IP, optical and submarine networks. The business unit is led by Federico Guillén.
Speaking with Fierce recently, Guillén said his group anticipates a lot more growth in fiber, largely accelerated by Covid and the work-from-home phenomenon. He said, “When all the countries started to lock down the first thing we saw was an increased amount of fiber-to-the-home.”
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He said for years operators had been “squeezing the last juice” out of their networks because fiber is expensive and takes a lot of effort to lay in the ground. Also, operators typically make their fiber plans on a 7-10 year horizon. But Covid has sped up those plans.