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By Tarmo Virki
HELSINKI, Oct 24 (Reuters) – Finland's Nokia cut its earnings prospects for 201
The telecom network equipment maker, which met the earnings expectations for the third quarter, also announced that it would halt dividend payments in order to increase investment in 5G and not resume until the liquidity situation improves to around 2 billion.
"Competitive intensity has increased in some accounts as some early-stage 5G competitors are seeking to participate," a statement said.
Nokia, along with the Swedish company Ericsson and Huawei, sells the majority of the radio access network devices that are crucial for 5G mobile services, and throttles its earlier ambitions for market share gains for 2019 and 2020.
Sales are now growing in the Consistent with market growth.
"The Repo It was a big disappointment … The outlook has been cut across the board, reflecting the company's persistent stumbling blocks as the new cycle of the network market gets underway," said Inderes analysts in a note ,
5G networks are at the center of a brewery technology war between the US and China, as they are expected to perform important functions from driverless vehicles to smart grids to military communications.
Some analysts say Nordic companies could benefit from the challenges of Huawei After Washington claimed that its equipment could be used by Beijing to spy on it, an allegation that Huawei denies.
Nokia added that mergers in the North American telecommunications market would limit customer spending, but said security concerns could boost new business.
Some customers are revising their vendors in the light of security concerns and creating short-term investment pressures to achieve long-term benefits, "the company said.
Nokia's report contrasts with its rival Ericsson's last week outperformed quarterly earnings expectations and raised market forecasts for this year and revenue target for 2020. The Swedish company said that demand for 5G super fast networks has grown faster than expected.
Nokia sees adjusted earnings per share (EPS ) for 2019 at € 0.18 to € 0.24 and for 2020 at € 0.20 to € 0.30, which have been reduced from € 0.25 to € 0.29 and € 0.37 to € 0.42 respectively.
Nokia reported a decline in underlying earnings to 0.05 euros per share in the July-September quarter, compared with 0.06 euros a year ago, but in line with a forecast ose of 0.05 euros in a survey by Refinitiv.
Nokia said it has over 48 commercial 5G deals and 15 live networks.
In the third quarter, net sales reached 5.7 billion euros compared to 5.5 billion euros in the previous year.
Nokia expects earnings for the fourth quarter of $ 0.135 per share, below analysts' expected earnings per share of $ 0.14 to $ 0.18.
Nokia shares fell 10.6% this year as investors continue to fear that the Finnish company might come too late to 5G.
($ 1 = € 0.8980) (written by Michael Kahn, editorial by Christian Schmollinger and Jason Neely)