Nokia shows flat growth in Q2 2017

Nokia’s Q2 2017 has shown a flat growth and reported net sales of EUR 5.6bn vis-a-vis EUR 5.6bn in Q2 2016.

Nokia Network net sales in Q2 2017 has grown by 5% year-on-year primarily due to ultra broadband networks whereas Nokia Technologies has grown by 90% primarily due to a new license agreement in Q2 2017.

In Nokia Networks, within ultra broadband networks, mobile networks declined in Q2 following a strong Q1, while fixed networks declined at a lower rate in Q2 compared to Q1. Within IP networks and applications, IP/Optical networks declined at a lower rate in Q2 compared to Q1, and applications & analytics grew. Global services net sales were approximately flat.

The company has shown strong Q2 2017 gross margin of 39.1% and operating margin of 8.2%, with solid performance across Ultra Broadband Networks, Global Services and IP Networks and Applications.

Nokia Technologies has shown 90% year-on-year net sales increase in Q2 2017, primarily due to a new license agreement in Q2 2017 and a license agreement that was expanded in Q3 2016. Approximately 40% of the EUR 175 million year-on-year increase was non-recurring in nature and related to catch-up net sales for Q1 2017.

158% year-on-year operating profit increase in Q2 2017, primarily related to higher net sales, partially offset by increased licensing-related litigation costs and the ramp-up of our digital health business unit.

Rajeev Suri, CEO, Nokia said, “I am proud of the entire Nokia team for delivering strong profitability in the second quarter and group-level net sales that were close to flat year-on-year. Underpinning this result was the excellent performance of Nokia Technologies, as well as robust gross margins and continued topline improvement in Networks. With the good work in the quarter, I remain confident that we will deliver on our full-year guidance of an operating margin of 8-10% in our Networks business.”

“Finally, we expect our primary addressable market with communication service providers to be slightly more challenging in 2017 than earlier forecast. We now expect a decline in the market in the range of 3-5%, versus our earlier view of a low-single digit decline. In addition, we continue to expect our Networks sales to perform in line with the market,” added Suri.