Nokia has reported a strong Q2 operating profit and raised its full-year outlook thanks to a turnaround of its business. The Finnish company’s April-June comparable operating profit rose to €682 million from €423 million a year earlier.
Nokia says it now expects full-year net sales of €21.7 billion to €22.7 billion, up from its prior estimate of €20.6 billion to €21.8 billion, with an operating profit margin of 10-12 per cent instead of the 7 per cent to 10 per cent expected previously.
Pekka Lundmark, President and CEO of Nokia, commented: “I am delighted that our strong start to 2021 continued in the second quarter. Our constant currency sales growth of 9 per cent, combined with good cost control, enabled us to deliver a comparable operating margin of 12.8 per cent. Even excluding a one-time software deal in Mobile Networks, we saw good underlying progress in operating margin. We are already seeing the benefits of our new operating model which helped us to deliver such a strong financial performance.
The highlight of the second quarter was the Mobile Networks launch of our new AirScale baseband and radio products with up to 75 per cent better power efficiency helping to reduce our environmental footprint and the lightest 32TRX massive MIMO active antenna in the market. In Network Infrastructure we sustained double-digit growth and have a series of product launches ahead in the second half to further strengthen our differentiation. Cloud and Network Services is making good progress on its portfolio rebalancing and Nokia Technologies continues to scale with two licensing agreements with automotive manufacturers including Daimler.
Considering our robust start to 2021, we are revising upwards our full year Outlook. We now expect a comparable operating margin between 10-12 per cent for full year 2021, compared to our previous range of 7-10 per cent. We have executed faster than planned on our strategy in the first half which provides us with a good foundation for the full year. We still however expect to face the earlier communicated headwinds in the second half, particularly with market share loss and price erosion in North America. Therefore, we still expect our typical quarterly earnings seasonality to be less pronounced in 2021. In addition, we continue to accelerate R&D investments and monitor risks around component availability, considering the strong demand for our products. Overall, I am very happy with the progress made in the first half. I want to thank our entire team for their hard work and commitment.”