Telecommunications company Teleste, operating in Kaarina, is transferring its assembly operations to its logistics center located in the United States.
The company manufactures amplifiers for telecommunications networks.
Tariffs imposed by the USA accelerated the transfer, says Esa Korolainen, Teleste’s Chief Operating Officer.
– This would certainly have happened even without Trump’s tariffs, but there’s no denying that it brought additional momentum and a need for local production.
According to Korolainen, there is now uncertainty in the business world about where Trump’s tariffs and the resulting stock market dips are taking the economy.
– One must be agile in their moves, but hasty decisions should not be made. By hastiness, I refer to making large investments and then realizing that the investment was made in the wrong place.
In the video accompanying the article, Teleste’s Chief Operating Officer Esa Korolainen says that their production volumes are growing and additional recruitment has been carried out during the winter.
Although a small reprieve was granted for the customs mess now, it is really good that Teleste started building a local warehouse and assembly in the US right at the beginning of the year, as was already mentioned in connection with the Q4 results.
Here are also Teleste’s comments from Turun Sanomat published on 4.4.2025:
Teleste announced new financial targets yesterday. These have been hoped for from the company on several occasions over the years, as the company previously had no stated targets. In light of the targets, the company’s level of ambition is clearly higher than our current forecasts. If these targets are met, the share will also be at a very different level than it is today.
Thanks for the mention, Atte. I also briefly commented on the matter the day before yesterday at our general meeting. A recording of my presentation is available on our investor pages.
Atte and Roni have given their preliminary comments as Teleste reports its Q1 results on Wednesday.
The company has anticipated that this year’s results will be weighted towards the second half of the year, when, in addition to growing volumes in North America for Broadband Networks, the first DOCSIS 4.0 deliveries will be made in Europe. Expectations for Q1 are therefore still cautious, and we predict that revenue and profit will decrease from a reasonably good comparison period before the growth quarters. US tariffs and the trade war create uncertainty over Teleste’s conquest of North America, and the report is specifically sought for a situation update and visibility around this theme.
Here are Ate’s quick comments on Teleste’s morning results.
Teleste reported stronger-than-expected Q1 results this morning, as Public Safety and Mobility made a very strong earnings improvement in early 2024. Orders received in Broadband Networks continued their strong growth, driven by North America, which supports growth in the latter half of the year. US import tariffs still create uncertainty over the rest of the year, but overall, Teleste is progressing well towards the earnings improvement we forecast for this year.
Roni interviewed the company’s CEO, Esa Harju, after the Q1 release.
Topics:
00:00 Introduction
00:09 First quarter summary
01:20 Background to profit improvement
02:09 Preparing for tariffs
03:35 Guidance
04:36 Financial targets
06:06 Wide range of profitability target
06:58 What will be the focus for the rest of the year?
In recent quarters, growing investments in North America and the gradual recovery of the European network equipment market have started to show quite nicely in Broadband Networks’ orders. Towards the end of the year, this should also start to reflect in revenue. Teleste has also done a good job with cost structure optimization in recent years, and a good foundation for earnings growth in the coming years has been laid as volumes start to increase
It’s also great that @EsaHarju has now joined the forum. I believe that it will now be possible to get answers from him to any questions that come to mind in the future
Teleste’s largest US customer, Cox Communications, is merging with Charter, and this entity would become the largest US cable operator. Below are a few news articles on the topic:
Apparently, mobile-side synergies are the biggest reason for the merger, but changes are certainly also expected on the cable side. As I understand it, the deal is intended to be finalized by next summer.
From Teleste’s perspective, consolidation offers both opportunities and threats. The company has now gained a good foothold with Cox, so perhaps after the merger, access to become a Charter equipment supplier will also open up. Charter is a very significant company for Teleste’s US market potential. On the other hand, technology choices and suppliers can be reconsidered in connection with the merger, so in that sense, a large arrangement also causes uncertainty. I will have to inquire about Teleste’s thoughts on this merger in connection with the Q2 results.
Here are Ate and Roni’s preview comments as Teleste publishes its Q2 report on Thursday.
We expect clear revenue growth from a soft comparison period, driven by Broadband Networks. However, in our forecast, this growth is not fully reflected in the bottom line, as tariffs have presumably caused costs during the quarter. Teleste has indeed anticipated that the full-year result will be weighted towards H2, and we expect the company to reiterate its current year outlook in the report. In the report, we will again monitor the company’s comments regarding its North American expansion, tariffs, and market outlook.
Excellent result in all respects! Congratulations! Let’s hope this trend continues, even though the comments for the end of the year were still cautious.
Here are Ate’s and Ron’s comments on this morning’s results.
Teleste’s Q2 figures exceeded our forecasts in terms of both growth and especially profit. Orders received were also strong, and the outlook consequently appears bright. The guidance was reiterated, even though it already seems cautious regarding profit. However, this is due to uncertainty about the impact of US import tariffs in the latter half of the year. Overall, the company’s own efforts are progressing well in the right direction, and the expansion in North America is already clearly reflected in the company’s figures.
Teleste’s Q2 earnings beat definitely gave me a particularly good feeling. For several years, the company has been promoting its expansion into North America, and along the way, it has encountered all sorts of challenges. As a result, earnings development has remained sluggish, and the stock has also been dormant for several years.
Now, however, North American volumes have clearly started to grow this year, and the trend is moving in the right direction. In recent years, to address challenges, the company has also clearly adjusted its cost structure and streamlined operations in many places. Now, volume growth is also better reflected in the bottom line!
As a result, the stock has risen 48% in a year and already 75% from last November’s lows. Valuation multiples for the coming years still do not look demanding with the improved earnings level, and in a good scenario, development could be even faster than our current assumptions.
Teleste has formed several strategic partnerships with electronics contract manufacturers.
Teleste states it is expanding its production closer to the North American market. The measure is intended to support the company’s growth in that market area.
