Nokia (NOK) Erupts 16% as 5G Bet Pays Off

Shares of Nokia (NYSE: NOK) are up 16.5% in early trading Thursday after the Finish telecom giant reported better-than-expected quarterly earnings.

NOK said its sales jumped 3% to 5.08 billion euros ($6.16 billion) to top the 4.72 billion euros consensus. The better-than-expected revenue performance was driven by a 28% jump in sales of its network infrastructure business.

Earnings per share came in at 0.07 euros per share to top the 0.01 euros per share expected from analysts. Comparable gross margin jumped to 38.2% from 36.4% a year ago, driven by growth in its 5G business.

"This year we are seeing great demand in 5G and also in what we call network infrastructure which is basically fiber connections to homes and offices," Chief Executive Pekka Lundmark said.

"We expect our typical quarterly earnings seasonality to be less pronounced in 2021.”

On a full-year basis, Nokia reiterated its revenue guidance of between 20.6 billion euros to 21.8 billion, which is what the analysts were expecting.

"These are a solid set of results and a good start to the year for Nokia. In particular the operating margin of 11% looks healthy and shows that the restructuring is having some positive impact,” said Richard Webb, CCS Insight analyst.

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