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Nokia Soars as Telecom Giant Posts First-Quarter Earnings Beat

Nokia's CEO says the company is putting 'its full attention into ensuring chip supply.'
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Nokia  (NOK) - Get Nokia Corporation Sponsored American Depositary Shares Report was surging Thursday after the telecom-equipment provider beat Wall Street's first-quarter earnings expectations.

Shares of the Finnish company were climbing 13.7% on Thursday.

Revenue increased 3% to €5.08 billion ($6.16 billion), beating analysts' expectations of $4.74 billion. Net profit totaled $451.5 million, or about 7 cents a share, beating analysts' consensus estimates of 1 cent a share.

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Chief Executive Pekka Lundmark said in a statement that he was "particularly pleased by strong sales growth across our Network Infrastructure business group."

Lundmark said the sales growth was "driven by increasing demand for next generation connectivity; good progress in Mobile Networks in securing full portfolio competitiveness; continued double-digit sales growth with our Enterprise customers; double-digit sales growth in North America; and good net sales development for Nokia Technologies."

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During a webcast, Lundmark said the company was putting its full attention into ensuring chip supply amid global shortages of semiconductors, and has done very well so far, according to Bloomberg.

Lundmark told Reuters that it "would be naive for anyone to say that this would not be a serious shortage, and most likely it will continue for another year or even two years."

The company continues to expect a slight improvement in comparable operating profit in full-year 2021 and "stable performance over the longer-term."

Last month, Nokia announced a five-year deal with AT&T  (T) - Get AT&T Inc. Report that is intended to help expand the telecom giant's 5G network coverage in the U.S.

Under the agreement, Nokia will provide its latest fifth-generation equipment to power 5G on AT&T’s C-Band network.

In February, Nokia reported stronger-than-expected fourth-quarter results but warned of a challenging year ahead.