Nokia cuts full-year profit outlook on tough competition

Adds quote, background

HELSINKI, Oct 24 (Reuters) - Finnish telecom network equipment maker Nokia NOKIA.HE on Thursday reported third-quarter profit in-line with expectations but lowered its full-year profit forecasts for 2019 and 2020, citing tough competition and additional investments.

"Competitive intensity has increased in some accounts as some competitors seek to take share in the early stage of 5G," it said in a statement.

Nokia now sees 2019 underlying earnings per share (EPS) at 0.18 euros to 0.24 euros and 2020 EPS at 0.20 euros to 0.30 euros. It had earlier forecast 2019 EPS at 0.25 to 0.29 euros, and 2020 EPS in the range of 0.37 to 0.42 euros.

Nokia reported a slip in underlying earnings to 0.05 euros per share during the July to September period, compared to 0.06 euros a year ago, but in line with 0.05 euros forecast in a Refinitiv poll.

The report is in stark contrast to rival Ericsson ERICb.ST which last week beat quarterly earnings expectations and lifted its market forecast for this year and its sales target for 2020, saying demand for superfast 5G networks was taking off more quickly than expected.

5G networks are at the centre of a technology battle between United States and China, as they are expected to host critical functions from driverless vehicles to smart electric grids and military communications, underscoring their importance to national security.

Nokia said it now has 48 commercial 5G deals and 15 live networks.

Nokia counts Sweden's Ericsson and China's Huawei HWT.UL as its main rivals, and some analysts say the Nordic companies may benefit from challenges faced by Huawei after Washington alleged its equipment could be used by Beijing for spying - charges Huawei denies.

($1 = 0.8980 euros)

(Reporting by Tarmo Virki and Anne Kauranen; Editing by Christian Schmollinger and Rashmi Aich)

((tarmo.virki@thomsonreuters.com; +372 564 4562;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.