1 week Ago By Anusuya Lahiri
Nokia Corp (NYSE: NOK) reported a fiscal third-quarter net sales decline of 8% year-on-year (7% in constant currency) to 4.33 billion euros ($4.76 billion), missing the analyst consensus estimate of $5.
34 billion . The comparable EPS was $0.07 (0.
06 euros), compared to the analyst consensus estimate of $0.08 . The stock slid after the quarterly print.
Also Read: Ericsson Q3 Earnings: Gains From AT&T Boost, CEO Signals North American Recovery The topline decline reflects weakness in the Indian market. The reported net income is 175 million euros, up from 133 million euros a year ago. Comparable net profit was 358 million euros, up from 293 million euros a year earlier.
Network Infrastructure sales increased by 1% year over year in CC. Cloud and Network Services sales decreased by 4% year over year in CC due to the divestment of the Device Management and Service Management Platform businesses. Nokia Tech sales climbed by 35% year over year in CC, driven mainly by signing patent license agreements with Oppo and Vivo.
Mobile Network sales declined by 17% year over year in CC, driven by a decrease in India. Margins: Gross margin climbed by 500 bps to 45.2%, and comparable gross margin improved by 490 bps to 45.
7%. The margins mainly reflected an improvement in Mobile Networks. The operating margin increased by 70 bps to 5.
7%, and the comparable operating margin improved by 160 bps to 10.5%, mainly due to higher gross margin and continued cost control. In the third quarter, Nokia held 5.
5 billion euros in net cash and generated 0.6 billion euros in free cash flow. Dividend: The Board resolved to distribute a dividend of 0.
03 euros per share. CEO Pekka Lundmark expects a significant acceleration in growth in the fourth quarter in Network Infrastructure. In Mobile Networks, it secured several vital deals in the quarter.
In Cloud and Network Services, the company noted momentum in 5G Core and substantial progress in network automation, cloudification, and enabling network APIs. He added that Nokia Technologies continues to benefit from more excellent stability following the conclusion of its smartphone renewal cycle and is making good progress in expanding into new growth areas. Nokia’s market share declined in North America after it lost contracts with Verizon Communications Inc VZ and AT&T Inc T , Reuters reports.
Lundmark told Reuters that telecom would never be a huge growth market for Nokia despite the recovery, which was weaker than expected. Nokia’s total addressable market in telecom is $84 billion, he told Reuters. As per Lundmark, Nokia has been targeting the data center and defense sectors to boost growth.
Lundmark flagged to Reuters demand recovery in India backed by the Vodafone Idea deal and a potential Bharti Airtel contract. FY24 Outlook: Nokia expects (6)%–(3)% (prior (2)%–3%) growth for Network Infrastructure sales, (22)%–(19)% (prior (19)%–(14)%) change in Mobile Networks sales, and (7)%–(4)% (prior (5)%–0%) change in Cloud and Network Services sales. Nokia reiterated a comparable operating profit of between 2.
3 billion euros and 2.9 billion euros and free cash flow conversion from a comparable operating profit of 30%—60%. The fiscal 2024 revenue and adjusted EPS consensus are $22.
22 billion and $0.37. Nokia stock is up 28% in the last 12 months.
Price Action: NOK stock is down 5.16% at $4.23 premarket at the last check on Thursday.
Image: Nokia Also Read: Lenovo’s AI Push Grows with Meta, Nvidia Collaboration Outside China © 2024 Benzinga.com. Benzinga does not provide investment advice.
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