Communication equipment stocks slump after Nokia, Ericsson warnings

Network equipment suppliers including Corning (GLW), Ciena (CIEN) and Sanmina (SANM) are falling in New York trading on Friday morning following warnings from European suppliers Nokia (NOK) and Ericsson (ERIC) that demand in North America is slumping. Both Nokia and Ericsson warned of an extended demand slump in North America, pushing back their forecasts for a recovery into next year. Nokia, which lowered its full year net sales outlook to a range of EUR 23.2B-EUR 24.6B from EUR 24.6B-EUR 26.2B, said the changes are related to its Network Infrastructure and Mobile Networks business groups. “The weaker demand outlook in the second half is due to both the macro-economic environment and customers’ inventory digestion. Customer spending plans are increasingly impacted by high inflation and rising interest rates along with some projects now slipping to 2024 – notably in North America. There is also inventory normalization happening at customers after the supply chain challenges of the past two years,” Nokia stated. Shares of Lumentum (LITE), Adtran (ADTN), Juniper Networks (JNPR), Infinera (INFN), CommScope (COMM), Ribbon Communications (RBBN) and Viavi (VIAV) have all seen weakness this morning as well.