On Thursday, Nokia reinstated its quarterly dividend and launched a share buyback program. The company also introduced new long-term goals as it starts to implement its turnaround strategy. According to the company, annual revenue this year is expected to be $25.5 billion to $26.8 billion, a jump from $22.2 billion in 2021.
Nokia (ticker: NOK) also went ahead and set new long-term targets for its operating margins of at least 14%, an improvement from its earlier targets for 2023 of between 11% to 13%. “Nokia enters 2022 in a powerful position with improved margins, faster-than-expected strategy execution and high order backlog, although the global supply chain situation remains tight,” said the company’s chief executive, Pekka Lundmark. “We see opportunities in the 5G rollout and growing enterprise market,” he said.
According to analysts polled by FactSet, fourth-quarter revenues missed expectations, falling by 2% to $7.2 billion from the same period in 2020.
On Thursday, Nokia’s U.S listed stock fell 4.02% in premarket trading, while in Helsinki, the company (ticker: NOKIA.Finland) shares were down 3.18%.
“While we view positively the level of margin ambition at over 14%, we think the time of scale of 3-5 years is disappointing relative to rising expectations,” A Citi analyst was quoted as saying.
“We understand management’s likely aim of under-promising and over-delivering (in which Nokia has done well under the current management team), but anticipate a cautious initial response to today’s long-term guidance,” the analysts said.
The company proposed the return of a dividend that had been suspended since 2019, of 0.08 euros per share and launched a two year 600 million euros share buyback program.