Tuesday , 21 May 2019
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Nokia Q2 results still lower after sale of handsets business

Nokia reported lower sales and operating profit in the second quarter, but said its main Networks division should do better over the full year. In the first quarter since the sale of its handset business, Nokia posted revenues of EUR 2.94 billion, down 7 percent from a year earlier on a pro forma basis. Adjusted operating profit fell 19 percent to USD 347 million, while the net loss narrowed slightly, to USD 0.01 per share from USD 0.02. 

Nokia Networks achieved an adjusted operating margin of 11.8 percent, and Nokia said it now expects the division to exceed its long-term target of 5-10 percent this year. Networks should also return to revenue growth in the second half of the year. Total profit was still down at the networks division, to EUR 281 million from EUR 328 million a year ago, and net sales dropped to EUR 2.6 billion from EUR 2.8 billion.
Excluding currency effects and divestments of non-core businesses, sales at Nokia Networks would have increased 1 percent year-on-year. 

Nokia otherwise benefited from increased licence revenue from Microsoft in the quarter, as well as the proceeds from the handsets sale. This left the company with net cash of EUR 6.5 billion at the end of June. It also paid off EUR 1.5 billion in convertible bonds from Microsoft and EUR 950 million in Nokia Networks debt, leaving it with no remaining financial covenants.  

Nokia said it expects pressure on profitability at its Here maps division to continue, as it invests in new products there. Here was breakeven in the second quarter, on sales flat at EUR 232 million. The company also forecast revenue from Nokia Technologies to continue at a run rate of around EUR 600 million this year, after EUR 147 million in revenue in Q2. 

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