Nokia estimates it won’t meet its financial targets by 2023 • Business • Forbes Mexico

Nokia said it will miss its financial targets for 2023 because it is unable to recognize revenue from license renewal discussions, which are expected to continue into next year.

The Finnish telecom equipment group said its full-year outlook is based on the completion of pending license renewals at its technology unit Nokia Technologies.

Nokia did not provide information about what these licenses are and which parties they are negotiating with to renew them. The company did not immediately respond to a request for comment.

Nokia said it does not expect negotiations to conclude before the end of the year, and now expects a resolution in 2024, which will benefit its financial results next year.

Nokia’s patent portfolio is based on more than €140 billion invested in research and development and includes approximately 20,000 patents, of which more than 5,500 are declared essential for 5G.

Read: Nokia to lay off 14,000 employees after declining profits

Earlier this year, Nokia signed a new long-term patent licensing agreement with Apple, as the existing license between the companies expires at the end of 2023.

Slow sales of 5G devices in key markets like North America have also eroded the company’s profit margins.

Nokia, which reported a 20% decline in third-quarter sales, said it may miss full-year targets for net sales, comparable operating margins and free cash flow.

It said net sales of network businesses are expected to improve significantly sequentially in the fourth quarter. It is scheduled to present its quarterly and annual results on January 25.

In October, the networking equipment maker cut 14,000 jobs to reduce costs, but it made no changes to its full-year outlook at the time.

Nokia forecasts net sales for 2023 between €23.2 billion and €24.6 billion. The aim is to save between 800 and 1.2 billion euros between now and 2026.

With information from Reuters

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