Thursday, April 30, 2020

Nokia's Q1 sales dip 3%, COVID-19 impact seen easing is 2H2020

Nokia reported Q1 2020 sales of EUR 4.913 billion, down 3% (constant currency) from EUR 5.032 billion a year ago. Net loss amounted to EUR 100 million, compared to EUR 442 million a year ago.

Some highlights:

  • 5G deal momentum continues, with 70 commercial deals and 21 live networks
  • Strong growth in Nokia Software and Nokia Enterprise
  • Majority of COVID-19 impact expected in Q2; continue to expect a seasonally strong second half
  • 5G Win Rate (measurement of converting end-of-2018 4G footprint into 5G, factoring in customer size, as well as new 5G footprint where Nokia did not previously have a 4G installed base) was over 100% outside of China and in the mid 90% range including China.

Rajeev Suri, President and CEO, Nokia:

"As I noted last quarter, we continue to have a sharp focus on Mobile Access and cash generation and saw good progress in both areas in the first quarter. “5G powered by ReefShark” shipments continue to increase and product cost reductions are proceeding well. We also announced some leading new solutions in the quarter, including a unique approach to dynamic spectrum sharing that is in test mode with select major customers today, and is expected to be available in volume over the summer, in line with the availability of DSS-capable mobile devices. On the services side, ongoing execution improvements drove improved year-on-year profitability. We also enhanced our total cash position to €6.3 billion, while net cash showed an expected seasonal decline to €1.3 billion."

"These improvements are, of course, coming at a time of unprecedented change, given the impact of COVID-19. Our top focus areas are protecting our employees, maintaining critical network infrastructure for customers, and ensuring we have a strong cash position. In Q1, we saw a top line impact from COVID-19 issues of approximately €200 million, largely the result of supply issues associated with disruptions in China."