Telecom equipment maker Nokia forecast a soft first half on Thursday after beating fourth-quarter profit and sales expectations.
The Finnish company said spending on fifth-generation (5G) mobile networks would fuel gains over the next two years, but warned 2019 would start off slowly before picking up steam in the second half noting countries were adopting 5G in different stages.
“We expect 2019 to have a soft first half followed by a much more robust second half,” CEO Rajeev Suri said in a statement.
The uncertain timing and a flat outlook for its network business after previously predicting growth in the unit injected a note of disappointment among analysts.
Traders predicted the shares would fall between two and seven per cent at the open citing Nokia’s disappointing guidance.
“Overall it was a quite good Q4 as expected,” said analyst Mikael Rautanen at research firm Inderes, which has an accumulate recommendation on Nokia.
“There was a bit more uncertainty in the outlook than I was expecting, but the big picture is still the same.
“The market is recovering well with 5G and they’re heading toward their 2020 targets.”
The networks industry has been battered by years of slowing demand since 4G network sales peaked in the middle of the decade, but a new cycle of network upgrades appear to be kicking in as demand for 5G services increases.