Friday, 01 May 2020 10:52

Nokia upbeat about Q1 growth, new deals

By

Nokia has reported the delivery of double-digit sales growth for the first quarter 2020, with 5G deal “momentum continuing”, with 70 commercial deals and 21 live networks for the three months of the quarter.

According to Nokia President and CEO, Rajeev Suri, Nokia’s “solid first quarter interim results showed broad year-on-year profitability improvements as our transformation and product cost reduction efforts started to take hold”.

“On a year-on-year basis, group-level non-IFRS operating margin was up by 3.6% points, networks gross margin increased by 3.5% points, Nokia Software had an excellent quarter with sharp margin improvements and strong momentum with customers in North America, and Nokia Enterprise delivered double-digit sales growth.

“As I noted last quarter, we continue to have a sharp focus on Mobile Access and cash generation and saw good progress in both areas in the first quarter. ‘5G powered by ReefShark’ shipments continue to increase and product cost reductions are proceeding well.

“We also announced some leading new solutions in the quarter, including a unique approach to dynamic spectrum sharing that is in test mode with select major customers today, and is expected to be available in volume over the summer, in line with the availability of DSS-capable mobile devices.

“On the services side, ongoing execution improvements drove improved year-on-year profitability. We also enhanced our total cash position to €6.3 billion, while net cash showed an expected seasonal decline to €1.3 billion.”

Nokia’s Q1 report shows that:

  • Non-IFRS (International Financial Reporting Standards) net sales in Q1 2020 were EUR 4.9bn, compared to EUR 5.1bn in Q1 2019.
  • Reported net sales in Q1 2020 were EUR 4.9bn, compared to EUR 5.0bn in Q1 2019.
  • On a constant currency basis, non-IFRS net sales decreased 4% and reported net sales decreased 3%.
  • Excluding one-time licensing net sales in Q1 2020 and Q1 2019, net sales decreased 2% on both a non-IFRS and reported basis.

As well as the continuing momentum of 5G, Nokia reported for Q1 improved margins “as transformation and product cost reduction efforts take hold”, including:

  • Confidence in resilient customer base and strong liquidity position
  • Strong growth in Nokia Software and Nokia Enterprise
  • Within previously provided Outlook ranges for full year 2020, adjusted the non-IFRS mid-points for EPS to EUR 0.23 and operating margin to 9.0%
  • Majority of COVID-19 impact expected in Q2; continue to expect a seasonally strong second half

Rajeev Suri said the improvements are coming at a time of “unprecedented change, given the impact of COVID-19”, adding that the company’s top focus areas are “protecting our employees, maintaining critical network infrastructure for customers, and ensuring we have a strong cash position”.

“In Q1, we saw a top line impact from COVID-19 issues of approximately €200 million, largely the result of supply issues associated with disruptions in China,” he said.

“We are adjusting the mid-points within our previously disclosed Outlook ranges for full-year 2020 to reflect the increased risks and uncertainty presented by the ongoing COVID-19 situation. We expect the majority of this COVID-19 impact to be in Q2 and believe that our industry is fairly resilient to the crisis, although not immune.

“We did not see a decline in demand in the first quarter. As the COVID-19 situation develops, however, an increase in supply and delivery challenges in a number of countries is possible and some customers may reassess their spending plans.

“Pleasingly, despite the majority of our R&D employees working from home, we have not seen any impact on our roadmaps, and, in fact, some key software releases are proceeding ahead of schedule. Additionally, we saw a massive increase in network capacity demands.”

According to Nokia, the COVID-19 crisis has made “vividly clear the critical importance of connectivity to keep society functioning”.

“We feel a sense of duty to our customers and the communities they serve to keep vital communication networks running and accommodate expanded needs as usage reaches unprecedented levels.

“We are continuing to advance our 5G roadmap and product evolution, as planned, and our COVID-19 mitigation actions in R&D have been very successful. We believe we remain on track with our plans to drive progressive improvement over the course of 2020.”


Subscribe to ITWIRE UPDATE Newsletter here

Now’s the Time for 400G Migration

The optical fibre community is anxiously awaiting the benefits that 400G capacity per wavelength will bring to existing and future fibre optic networks.

Nearly every business wants to leverage the latest in digital offerings to remain competitive in their respective markets and to provide support for fast and ever-increasing demands for data capacity. 400G is the answer.

Initial challenges are associated with supporting such project and upgrades to fulfil the promise of higher-capacity transport.

The foundation of optical networking infrastructure includes coherent optical transceivers and digital signal processing (DSP), mux/demux, ROADM, and optical amplifiers, all of which must be able to support 400G capacity.

With today’s proprietary power-hungry and high cost transceivers and DSP, how is migration to 400G networks going to be a viable option?

PacketLight's next-generation standardised solutions may be the answer. Click below to read the full article.

CLICK HERE!

WEBINAR PROMOTION ON ITWIRE: It's all about webinars

These days our customers Advertising & Marketing campaigns are mainly focussed on webinars.

If you wish to promote a Webinar we recommend at least a 2 week campaign prior to your event.

The iTWire campaign will include extensive adverts on our News Site itwire.com and prominent Newsletter promotion https://www.itwire.com/itwire-update.html and Promotional News & Editorial.

This coupled with the new capabilities 5G brings opens up huge opportunities for both network operators and enterprise organisations.

We have a Webinar Business Booster Pack and other supportive programs.

We look forward to discussing your campaign goals with you.

MORE INFO HERE!

BACK TO HOME PAGE
Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

Share News tips for the iTWire Journalists? Your tip will be anonymous

WEBINARS ONLINE & ON-DEMAND

GUEST ARTICLES

VENDOR NEWS

Guest Opinion

Guest Interviews

Guest Reviews

Guest Research

Guest Research & Case Studies

Channel News

Comments