Nokia posts weak profits, sees 5G boost later in 2018

Nokia sees 5G roll-outs starting later this year in the US, followed next year by upgrades in Japan and South Korea. (Reuters)
Updated 26 July 2018
0

Nokia posts weak profits, sees 5G boost later in 2018

HELSINKI: Telecom network equipment maker Nokia on Thursday posted quarterly earnings below market expectations but vowed that business would recover later this year on the back of a next-generation 5G cycle picking up pace in the US.
The Finnish company’s non-IFRS operating profit in the second quarter, which it had signaled would be weak, fell 42 percent from a year ago to €334 million ($392 million), missing the analyst mean forecast of €373 million.
The networks business, which makes about 90 percent of Nokia’s sales, had a quarterly operating profit margin of 1.5 percent, compared to a market consensus of 4.0 percent and the company’s full-year target of 6-9 percent. Virtually all of its quarterly profit came from its small patent licensing division.
“(Quarterly) results were consistent with our view that the first half of the year would be weak followed by an increasingly robust second half,” CEO Rajeev Suri said in the interim report.
“I am able to confirm that we expect to deliver 2018 results within the ranges of our annual guidance.”
The industry, including Sweden’s Ericsson and China’s Huawei has struggled since demand for the current generation of 4G mobile equipment peaked in 2015.
Nokia sees 5G roll-outs starting later this year in the US, followed next year by upgrades in Japan and South Korea. The company also signaled it was seeing early strength in China, which is expected to move to 5G later in 2019.
“We expect market conditions to improve further in the second half, particularly in (fourth quarter), Nokia’s seasonally strongest quarter, and as 5G accelerates significantly,” Suri said.
“The networks result is disappointing ... in the second half, they must improve a lot to meet that full-year guidance,” said Inderes analyst Mikael Rautanen with a “buy” rating on the stock.


Dubai schools allowed to raise fees after last year’s freeze hit GEMS listing

Updated 59 min 48 sec ago
0

Dubai schools allowed to raise fees after last year’s freeze hit GEMS listing

  • UAE authorities fixed the fees in hopes of stimulating the economy
  • The maximum increase for next year will be 2.07 percent for 90 percent of the schools

DUBAI: Dubai will allow a modest increase in school fees for the majority of students in the 2019-2020 academic year, the government said, after last year’s freeze triggered a delay in the London listing of a major school operator.
The move is likely to provide some reprieve for private investors such as private equity firms, who own most of the schools in the country, a Gulf Arab state that acts as a Middle East hub for international companies.
Last year’s move to freeze Dubai school had hit the initial public offering of Blackstone-backed, Middle East-focused education company GEMS, Reuters had reported, citing sources. The London listing was delayed after authorities in Dubai unexpectedly decided to freeze tuition fees, meaning the company’s financial forecasts had to be adjusted, they said.
Dubai’s move last year to freeze school fees came amid a number of other measures to cut costs in a bid to stimulate the economy that has been hurt by a downturn in property prices.
The Dubai government said it will allow an increase in school fees for 90 percent of students by a maximum 2.07 percent from the 2019-2020 academic year.
Sheikh Hamdan bin Mohammed bin Rashid Al-Maktoum, the crown prince and son of Dubai’s ruler, approved the new framework where the Dubai School Inspection Bureau will assess the quality of education in each school against its index and rank them accordingly.
Schools in which the quality of education is declining according to the government’s index will not be allowed to increase their fees.
Only 10 percent of the students in Dubai will have their fees increased by more than 2.07 percent, it said.