Thursday, July 26, 2018

Nokia posts dip in Q2 revenues and profitability

Nokia reported net sales in Q2 2018 of EUR 5.3 billion, down 5% compared to EUR 5.6 billion in Q2 2017. On a constant currency basis, net sales would have been down 1%. Non-IFRS diluted EPS in Q2 2018 was EUR 0.03, compared to EUR 0.08 in Q2 2017.

Nokia’s Networks business net sales were EUR 4.7 billion, with operating profit of EUR 69 million

  • The company expects commercial 5G network deployments to begin near the end of 2018. 
  • Strong momentum continued with large enterprise vertical and webscale customers, with double-digit year-on-year growth in net sales.
  • Approximately 40% of sales pipeline now comprised of solutions, products and services from multiple business groups.

Nokia Technologies net sales were EUR 361mn, with operating profit of EUR 292mn

  • Strong track record maintained, with 23% year-on-year growth in recurring licensing net sales and 27% year-on-year operating profit increase in Q2, primarily related to license agreements entered into in 2017.
  • Nokia Technologies continued to make good progress on new licensing agreements; no major agreements were announced in Q2.

Rajeev Suri, President and CEO, Nokia commented:

"Nokia’s Q2 2018 results were consistent with our view that the first half of the year would be weak followed by an increasingly robust second half. Pleasingly, I am able to confirm that we expect to deliver 2018 results within the ranges of our annual guidance."

"Our view about the acceleration of 5G has not changed and we continue to believe that Nokia is well-positioned for the coming technology cycle given the strength of our end-to-end portfolio. Our deal win rate is very good, with significant recent successes in the key early 5G markets of the United States and China."

"The installed base of our superb high-capacity AirScale product, which enables customers to quickly upgrade to 5G without a hardware swap, is growing fast. And, the strength of our end-to-end portfolio remains a differentiator. When you look at our sales pipeline, 40% of it is now comprised of end-to-end deals. That is the highest level we have seen to-date. "

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