Finnish telecommunications giant Nokia released this morning their financial results for the third quarter (Q3) of 2021, as well as the results for the period from January to September of 2021. The company beat market expectations in terms of profit, and emphasised constraints on the market due to the global supply chain issues.
Nokia recently announced a new structure (business groups) inside the company, so we have Mobile Networks, Network Infrastructure, Cloud and Network Service, and Nokia Technologies.
In Q3 2021, Nokia reported 5.399 billion euro in net sales (2% increase compared to Q3 2020) that translated into 351 million euro in profit, compared to 197 million euro the same period previous year. The report has two types of data – reported and comparable, where comparable is adjusted to the new business structure. For more details between the two, you can check the link to the full report at the end of the article.
Nokia’s biggest division, Mobile Networks, posted 2.315 billion euro in net sales, which is a 5% decrease on an annual level. The main reason for that is loss of a contract in North America. The group remained profitable reporting 137 million euro in profits, a decrease 25% compared to Q3 2020. The Network Infrastructure business reported net sales of 1.915 billion euro (7% YoY increase) and profit of 100 million euro (18% YoY decrease). The Cloud and Network Services group posted revenue of 748 million euro for Q3 2021 (13% increase compared to previous year), and a profit of 23 million euro, compared to a loss of 148 million euro in Q3 2020.
Regarding Nokia Technologies, this business unit continues to perform strong by increasing revenue for the quarter to 367 million euro (11% YoY increase), and profits to 285 million euro (8% YoY increase). Nokia explains that the increase in revenue is a result of higher new and renewed patent licensing agreements, and a one-time transaction. They also mention that lower net sales were recorded from one licensee that is now in litigation with Nokia.
Nokia’s CEO Pekka Lundmark cautioned that the uncertainty around the global semiconductor market limits Nokia’s visibility for Q4 and the whole year of 2022. The Helsinki Stock Exchange reacted positively to Nokia’s financial release with the stock price going up almost 5% at the time of writing of this article.