Shares of Nokia (NOK 1.08%) jumped 11% on Thursday after the telecom equipment maker delivered surprisingly strong first-quarter results.
Nokia's net sales rose 3% year over year -- and 9% when excluding the impact of currency fluctuations -- to 5.1 billion euros ($6.2 billion). This growth was fueled in part by 5G-related gains in Nokia's network infrastructure and mobile networks businesses.
Enterprise sales were particularly strong. New customer additions helped to drive a 14% (18% in constant currency) increase in revenue in this key segment.
Better still, Nokia's profitability improved as its sales mix shifted toward higher-margin 5G products and its efficiency initiatives took hold. Nokia's gross margin rose 2.6 percentage points to 37.9%, while its operating margin came in at 8.5%, up from negative 1.5% in the year-ago period.
All told, Nokia's comparable net profit increased more than 11-fold to 375 million euros ($455 million). That was well above analysts' estimates for adjusted profit of 90 million euros.
Management maintained its full-year financial forecast for revenue of 20.6 billion to 21.8 billion euros ($25 billion to $26.4 billion). But CEO Pekka Lundmark said Nokia's strong first-quarter performance makes it more likely to achieve the high end of its 7% to 10% operating margin target.
"Today's results demonstrate that we are on track to deliver on our three-phased plan to achieve sustainable, profitable growth and technology leadership," Lundmark said.