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Nokia Q2 2017 results reveal strong Profitability, Nokia Technologies shines

Nokia

Nokia has today made its Q2 2017 Earnings report public. Highlights are Nokia Technologies registering big boost in both sales and profitability, very strong margin of 39.1% in Networks business, overall gross margin of 41.7%.

Nokia Technologies has seen 90% year-on-year net sales increase and 158% year-on-year operating profit increase in Q2 2017, primarily due to higher patent and brand licensing income. Nokia Networks has 5% year-on-year net sales decrease in Q1 2017, but the strong margin of 39.1% steals the show.

Here are the Nokia Q2 2017 results highlights,

FINANCIAL HIGHLIGHTS

  • Non-IFRS net sales in Q2 2017 of EUR 5.6bn (EUR 5.7bn in Q2 2016). Reported net sales in Q2 2017 of EUR 5.6bn (EUR 5.6bn in Q2 2016).
  • Non-IFRS diluted EPS in Q2 2017 of EUR 0.08 (EUR 0.03 in Q2 2016). Reported diluted EPS in Q2 2017 of negative EUR 0.07 (negative EUR 0.12 in Q2 2016).

Nokia’s Networks business

  • 5% year-on-year net sales decrease in Q2 2017, primarily due to Ultra Broadband 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.
  • 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

  • 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.

Q2 2017 Earnings Table:

EUR million
(except for EPS in EUR)

Q2’17

Q2’16

YoY
change

Q1’17

QoQ change

Q1-
Q2’17

Q1-
Q2’16

YoY
change

Net sales –
constant currency (non-IFRS)

(2)%

7%

(4)%

Net sales (non-IFRS)

5 629

5 670

(1)%

5 388

4%

11 017

11 285

(2)%

  Nokia’s Networks business

4 971

5 222

(5)%

4 902

1%

9 873

10 415

(5)%

Ultra Broadband Networks

2 165

2 356

(8)%

2 236

(3)%

4 401

4 653

(5)%

Global Services

1 448

1 444

0%

1 361

6%

2 809

2 888

(3)%

IP Networks and Applications

1 358

1 421

(4)%

1 304

4%

2 663

2 874

(7)%

  Nokia Technologies

369

194

90%

247

49%

616

391

58%

  Group Common and Other

307

270

14%

254

21%

562

506

11%

Gross profit (non-IFRS)

2 350

2 205

7%

2 196

7%

4 546

4 433

3%

Gross margin % (non-IFRS)

41.7%

38.9%

280bps

40.8%

90bps

41.3%

39.3%

200bps

Operating profit (non-IFRS)

574

332

73%

341

68%

915

677

35%

  Nokia’s Networks business

406

313

30%

324

25%

730

650

12%

Ultra Broadband Networks

191

184

4%

245

(22)%

437

311

41%

Global Services

123

34

262%

55

124%

179

137

31%

IP Networks and Applications

91

95

(4)%

23

296%

114

202

(44)%

  Nokia Technologies

230

89

158%

116

98%

346

195

77%

  Group Common and Other

(62)

(70)

(99)

(161)

(169)

Operating margin % (non-IFRS)

10.2%

5.9%

430bps

6.3%

390bps

8.3%

6.0%

230bps

Financial income and expenses (non-IFRS)

(63)

(29)

117%

(81)

(22)%

(144)

(96)

50%

Taxes (non-IFRS)

(74)

(135)

(45)%

(48)

54%

(122)

(275)

(56)%

Profit (non-IFRS)

441

171

158%

203

117%

644

310

108%

Profit attributable to the equity holders of the parent (non-IFRS)

449

194

131%

196

129%

646

346

87%

Non-controlling interests (non-IFRS)

(9)

(24)

(63)%

6

(2)

(37)

(95)%

EPS, EUR diluted (non-IFRS)

0.08

0.03

167%

0.03

167%

0.11

0.06

83%

 

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Nayan

Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long.

He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing.
Write to him at Email: [email protected]

http://www.nokiapoweruser.com
  • CA-Sandra

    Nokia now is a patent troll. Like Microsoft.

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