It might come as a surprise to some, but exploding prices for food, gas, and almost every necessity are prompting consumers to pull back on their spending in pretty much every other area. That hit Nokia (NYSE:NOK) square in the earnings report and also in the share price. Nokia was down nearly 10% at the time of writing, and it’s all because things are looking increasingly pessimistic.
Nokia turned in a mixed bag of earnings, including a miss on EPS figures—it posted €0.06 when analysts expected €0.07—but a win in revenue, posting €5.86 billion against the €5.74 billion analysts looked for. Revenue increased by 9.5% against this time last year, which isn’t exciting, but it’s not the kind of thing that prompts a double-digit slide in share prices, or close to it. However, the strange part, Nokia’s guidance, was yet to come.
Nokia stuck to its guns on full-year guidance and noted that the second half of 2023 was likely to be stronger than the first half. Strangely, though, Nokia also noted that consumers were reining in their spending, which meant that it was likely to take at least some hit from declining spending. Worse, Nokia admitted that it wouldn’t be able to properly protect itself during this period of restrained spending. Pekka Lundmark, Nokia’s CEO, noted that there was an “…ongoing need to invest in 5G and fiber…” and that the result would be “…a question of timing.”
Wall Street, meanwhile, is still in on Nokia, if barely. Analyst consensus calls Nokia stock a Moderate Buy with three Buy and two Hold ratings. Best of all, though, is that Nokia’s average share price of $6.50 gives it a potential upside of 55.69%.