Nokia Corporation's (NYSE: NOK) shares surged in early trade in Helsinki on Thursday, as the company posted better-than-expected numbers for the fourth quarter.
The Finnish telecom equipment maker reported earnings of 16 cents (EUR 0.15) per share, up 15.3% compared to the similar quarter last year. Analysts polled by Bloomberg and Refinitiv had estimated the investors to comparable net earnings per share as last year.
Nokia reported a quarterly profit of $1.24 billion, up 1% year-on-year, and beating analyst estimates by 3.67%.
EPS for the financial year 2019 came at 24 cents and operating profit at $2.2 billion.
Why It Matters
The upbeat earnings came as a surprise as Nokia downgraded its outlook for the quarter in October.
The company had said that it would pause dividend payments and invest more in fifth-generation wireless telecommunications technology, where it faces intense competition from South Korean and Chinese companies.
It had put its expectations at an EPS of 15 cents (EUR 0.135) per share for the quarter at the time.
The rise in profits is primarily due to the various cost-cutting measure it took, Nokia said in the earnings report.
"When I look at Nokia's full-year 2019 performance, we saw good progress in our strategic focus areas of enterprise and software," the company's CEO Rajeev Suri said in a statement. "We recognize, however, that we have faced challenges in Mobile Access and in cash generation."
"We will have a sharp focus on these two areas over the course of 2020, which we believe to be a year of progressive improvement as the actions we have underway start to deliver results," the CEO added.
Nokia kept its outlook for the year 2020 in line with its previous guidance level of an EPS between 22 cents and 28 cents.
Nokia's shares traded 3.54% higher at $4.12 (EUR 3.74) at press time in Helsinki on Thursday. The shares were up 1.74% at $4.10 in Thursday's pre-market session in New York.