Nokia, thhe Finnish vendor, has improved cash generation and said these were “clear indications of a return to strength in mobile radio”. The firm also increased earnings-per-share year on year, despite the pandemic, seeing its profits rise 22 per cent to €316 million in Q2 despite quarterly revenues falling by 11 per cent or €5.1 billion.
A statement from Nokia’s outgoing CEO and President, Rajeev Suri, read: “These results show that our execution has improved as planned and that we are well positioned to end the year with a significantly stronger financial position. As a result, we are adjusting upward both the midpoint of our full-year 2020 non-IFRS EPS [non- International Financial Reporting Standards earnings per share] and operating margin guidance within our previously disclosed outlook ranges.”
Profitability gains in Q2 were helped by 4.5 [er cent year-on-year improvement in Networks’ gross margin, building on a 3.5 per cent gain in Q1. This drove Nokia non-IFRS gross margin to 39.6 per cent.
Nokia Enterprise also grew year-on-year constant currency sales by 18 per cent compared to one year ago and expanded margins.
However, Nokia’s revenue was down in Q2, mostly as a result of Covid-19 but also due to a sharp decline in China “based on the prudent approach we have taken in that market,” the statement noted.
Suri pointed to 83 5G deals, and continuing momentum with a software upgrade that allows millions of Nokia 4G/LTE radios deployed to more than 350 customers to be migrated to 5G.