Nokia Sinks on Surprise Loss Amid ‘Ongoing Market Weakness’

American depositary receipts (ADRs) of Nokia ( NOK ) dropped Thursday after the Finnish telecommunications company reported second-quarter results that included lower sales than analysts had expected and a surprise loss.

Nokia reported a loss of 142 million euros ($155.2 million) for the quarter, largely thanks to an impairment charge of over EUR500 million related to the company’s Submarine Networks segment being classified under “discontinued operations” after it agreed to sell the business to the French government last month. Analysts polled by Visible Alpha had expected a profit of EUR155 million.

Sales fell 18% year-over-year to EUR4.47 billion, with Chief Executive Officer (CEO ) Pekka Lundmark noting that they were being impacted by “ongoing market weakness.”

Nokia Expects Second-Half Improvements

Despite the worse-than-expected first- and second-quarter sales and lowered full-year sales projections for its all three of its divisions, Nokia affirmed its full-year profit outlook as Lundmark said the company believes the telecommunications industry is “stabilizing.”

“Given the order intake seen in recent quarters we expect a significant acceleration in net sales growth in the second half,” Lundmark said. “While the dynamic is improving, the net sales recovery is happening somewhat later than we previously expected, impacting our business group net sales assumptions for 2024.”

The company also expects to speed up the pace of its EUR600 million stock buyback program that was announced in January , expecting the program to be completed by the end of 2024 rather than the initial two-year timeline, as the company looks to offset the dilution that could come as a result of its deal to acquire Infinera ( INFN ) it announced last month.

Nokia ADRs were down more than 5% to $3.69 when markets opened Thursday.