Nokia beats market expectations with Q4 2020 financial results

This morning, Nokia released the financial reports for the fourth quarter of 2020 (Q4 2020) and for the full financial year 2020 (FY2020). The results are better than what market analysts expected, while Nokia’s stock price on Helsinki Stock Exchange this morning stayed approximately the same since opening, indicating that investors aren’t that impressed.

In Q4 2020, Nokia reported revenue of 6.568 billion euro, a decline of 5% compared to Q4 2019. The gross margin increased from 38.5% in Q4 2019 to 39.2% Q4 2020. Nokia’s operating profit in Q4 2020 was 475 million euro, compared to 803 million euro in Q4 2019. Really positive aspect of this report is that Nokia’s “net cash and current financial investments” grew from 1.7 billion euro in 2019 to 2.5 billion euro at the end of 2020. The total cash and current financial investments sit at 8.1 billion euro, compared to 6 billion euro at the end of 2019.

In terms of Nokia Technologies, in Q4 2020 the net sales increased 2%, while profits decreased 1%. In other words, a quarter of stagnation, just like the full year results. Nokia said that the net sales for technologies increased due to higher patent licensing and catch-up net sales for renewed agreements, but it was partially offset by lower brand licensing net sales.

For full year 2020, Nokia reported 21.867 billion euro in net sales, a decline of 6% compared to 2019. Profits grew 89%, from 485 million euro in 2019 to 918 million euro in 2020. In the previous year, COVID affected Nokia’s net sales by  -200 million euro, that will be in majority recognised in some feature quarters, but also benefited the expenses side by 250 million because of lower travel and personnel expenses.

In late 2019, Nokia decided to stop paying dividends until a favourable cash position was achieved. In today’s report, they state that: “the Board does not propose a dividend or dividend authorization for the financial year 2020. After Q4 2021, the Board will assess the possibility of proposing a dividend distribution for the financial year 2021, taking into account the net cash position, as well as the outlook for 2022.

If you find any interesting stuff from the report we missed, leave it freely in the comments below. 🙂

Nokia Q4 2020 PDF