Nokia maintained its outlook for full-year sales, despite a small slowdown to 2 percent revenue growth in the third quarter. The company said it also expects to achieve the high end of its annual forecast for the adjusted operating margin, after a strong improvement in profitability in the past quarter.
Revenues for the three months to September rose 2 percent, also at constant currency rates, to EUR 5.399 billion. Growth was slower than the 4 percent in the first half due to the expected supply chain issues and slower mobile networks business in North America. Over the full year, Nokia expects revenues of EUR 21.7-22.7 billion, after EUR 15.8 billion in the first nine months.
Adjusted operating profit jumped 30 percent year-on-year to EUR 633 million in Q3, for a margin of 11.7 percent versus 9.2 percent a year ago. Net profit rose 78 percent to EUR 351 million, and EPS doubled to EUR 0.06. Free cash flow reached EUR 706 million, the sixth consecutive quarter of positive cash flow.
The target range for the adjusted operating margin is 10-12 percent in 2021 and 10-13 percent in 2023. While Nokia expects to hit the high end of the range this year, the company said this may limit its room for further expansion in 2022. Furthermore, the uncertainty over semiconductor supplies makes visibility on Q4 and 2022 limited, despite strong demand in end-markets. Nokia said it's working with customers to mitigate the impact of the "unprecedented cost inflation" facing the industry.
