Nokia recently released its earnings report. The company registered a 6 percent sales drop in its network business in Q1, 2017 despite managing to beat analyst expectations by a fair margin. The company reported net sales of EUR 5.4 billion (as compared to EUR 5.5 billion in Q1 2016). The company’s first-quarter group earnings before interest and taxes (EBIT) fell 1 percent from a year ago, and stood at around $372 million.
Nokia Technlogies registered a 25% year-on-year net sales increase in Q1 2017. The company said that this substantial increase was largely due to higher patent and brand licensing income and the acquisition of Withings.
The increase was partially offset by the absence of licensing income related to certain expired agreements.
Nokia said that around one third of the net increase in its technologies business was due to non-recurring net sales related to a new license agreement. Nokia Technologies also registered a 9% year-on-year operating profit increase in Q1 2017. These were caused mainly by higher net sales. However, operating costs marked a similar increase reducing the profits a tad. This year-on-year operating expense inrease was caused mosty due to a spike in money spent in association with Nokia’s digital health and digital media businesses and increased licensing-related litigation costs
Meanwhile, the company’s network business did not d quite so well and marked a 6% year-on-year net sales decrease in Q1 2017 primarily due to IP/Optical Networks and Fixed Networks. Sales in Mobile Networks and Applications & Analytics remained mostly flat while the company exhibited strong Q1 2017 gross margin of 39.5% and solid operating margin of 6.6%.
As per CEO Rajeev Suri:
In IP/Optical Networks our business is heavily weighted towards communication service providers, and that market is currently quite soft. We are making good progress in expanding our business to new customers, including large internet companies where growth is strong, and expect that a coming IP product refresh will strengthen our competitive position.
He also added:
Overall, given Nokia’s performance in the first quarter, I am optimistic about the year ahead, even if cautiously so. Our competitive position is strong, we are executing well, and, as a result, we are able to confirm our guidance for full-year 2017.
You can read the complete report, right here.
