Nokia announced its financial report for the first quarter of 2023 today, with an adjusted operating profit of 479 million euros (currently about 3.616 billion RMB), estimated at 544.4 million euros; adjusted After earnings per share of 0.06 euros, estimated 0.07 euros.
The summary highlights are as follows:
In constant currency, net sales increased 9% year-over-year (10% reported).
In constant currency, corporate net sales rose 62% year-over-year (65% reported).
Comparable gross margin decreased 300 basis points year-on-year to 37.7% (-310 basis points to 37.5% reported), due to lower contribution from the regional mix as well as Nokia Technologies, partly related to the exercise of licensing options in the fourth quarter of 2022.
Comparable operating margin declined 270 basis points year-over-year to 8.2% due to the aforementioned factors impacting gross margin and significant volatility in venture fund contributions, partially offset by stringent cost controls.
Reported operating margin increased 70 basis points year-over-year to 7.3%. In addition to the aforementioned factors, margins improved due to the provision recognized last year versus a partial reversal this year as well as divestment related gains.
Comparable diluted EPS was EUR 0.06; reported diluted EPS was EUR 0.05.
Free cash flow was negative EUR 100 million and the net cash balance was EUR 4.3 billion.
Outlook 2023 unchanged (at constant exchange rates). Full-year net sales are expected to be between EUR 24.6 billion and EUR 26.2 billion using exchange rates on March 31, 2023. Comparable operating margin guidance remains at 11.5% to 14.0%.From the perspective of each business unit:
Net sales in the Network Infrastructure segment continued to grow at a constant rate of 13%. Mobile network net sales rose 13% as 5G deployments increased in India, more than offsetting a slowdown in spending in North America.
Cloud and Network Services delivered 3% constant currency net sales growth, although profitability was impacted by product mix.
Nokia Technologies net sales fell 22% in the quarter, mainly due to no longer contributing from long-term licenses following exercise of the option in Q4 2022.
Enterprise business net sales grew 62% in constant currency and are expected to deliver strong double-digit growth for the full year.
