Nokia Corporation’s share price tumbled on Thursday after the Finnish telecoms equipment maker reported third-quarter sales that fell short of market forecasts, fuelling concerns that the global network equipment downturn is far from over. The stock slid more than 8% in Helsinki trading, making it one of the worst performers on the STOXX 600 index, as investors reacted to a 7% drop in net sales compared with the same period last year.
The company, a major rival to Sweden’s Ericsson and China’s Huawei, said its Network Infrastructure business suffered a 9% decline in sales, driven by weaker spending on 5G gear by operators in North America and parts of Europe. Nokia’s chief executive Pekka Lundmark described the market environment as “challenging” and said customers were still working through excess inventory built up during the pandemic-era supply chain scramble.
The news sent ripples through the broader telecoms sector. The STOXX 600 Telecommunications index fell 1.2% on the day, with London-listed exchange-traded funds tracking European telecoms also edging lower. For UK investors who hold European equity funds or pension portfolios with exposure to Nokia, the slide represents a fresh headwind in a sector already struggling with high capital expenditure and sluggish revenue growth.
Analysts at Morgan Stanley cut their price target for Nokia shares from €4.20 to €3.80, citing a “prolonged recovery timeline” for the networks business. In a note to clients, they said: “While Nokia’s cost-cutting measures are encouraging, the top-line weakness suggests the market may not rebound until late 2025 at the earliest.” The brokerage maintained an ‘equal-weight’ rating, advising clients to await clearer signs of demand stabilisation.
Nokia’s results echo similar warnings from Ericsson, which last week reported a 4% drop in quarterly sales and flagged ongoing weakness in North America. The twin disappointments underscore the cyclical nature of the telecom equipment industry, which benefited from a surge in 5G rollouts during the early 2020s but now faces a prolonged period of belt-tightening by network operators.