Finnish telecommunications giant Nokia published today its financial results for the second quarter (Q2) of 2017 and for the first half of 2017. By the non-IFRS reporting, that exclude “costs related to the acquisition of Alcatel-Lucent and related integration, goodwill impairment charges, intangible asset amortization and other purchase price fair value adjustments, restructuring and associated charges and certain other items that may not be indicative of Nokia’s underlying business performance“, Nokia posted €5.629 billion in revenue and €441 million in profit.
The earning per share was €0.08, while the analysts expected €0.05, meaning that Nokia beat market expectations in this quarter. Rajeev Suri, the CEO of Nokia, added that Nokia is satisfied with its strong business performance, but warned that the networks market will decline 3-5% this year.
In Q2, Nokia’s reported revenue (IFRS) grow 1% to €5.619 billion compared to Q2 2016. The “Networks” business declined 5% to €4.971 billion year-on-year (YoY), but grew 1% quarter-on-quarter (Q0Q). The “Networks” business reported €406 million in profit, which is 30% YoY and 25% QoQ increase. Even though Nokia Networks’ revenue declined on a yearly basis, because of strong leadership in restructuring and optimization of product portfolio, Nokia decreased the “cost of sales” and increased the profitability of its core business, but the declining market definitely makes things harder.
Nokia Technologies reported (IFRS) €369 million in revenue, 90% increase YoY and 49% increase QoQ, and €230 million in profits (158% up YoY, 98% up QoQ). Nokia Technologies revenue was increased thanks to a the one-time Apple payment for patents, offset by lower licensing revenue from some partners. Nokia says that €70 million were catch-up sales from last quarter. Digital Health and Digital Media (OZO+Withings) posted €12 million in revenue, but HMD was just mentioned, with no numbers given. Nokia also announced that it expects to start receiving royalties from Xiaomi from Q4 this year.
Overall, Nokia reported (IFRS) an operating loss of (-)€433 million, which a decrease compared to the loss of (-)€667 million a year ago and (-)€473 in Q1 2017. In Q2, Nokia acquired Comptel, had costs related to integration of Alcatel-Lucent, and paid €840 million to shareholders.
Helsinki Stock Exchange reacted positively to this report, and Nokia’s stock price went up 2% in the opening.