Nokia claimed “strong” results for the second quarter, which it said means it is well positioned to meet its full year objectives – although there was little update on the progress of its HERE strategic review.
“While we expect the telecom infrastructure market to remain challenging, I believe that our disciplined operating model and strong execution capabilities will continue to differentiate us in this environment,” Rajeev Suri, president and CEO of Nokia, said.
Sales in its main Networks units were up 6 per cent year-on-year to €2.73 billion, although Nokia noted it would have seen a 4 per cent decline at constant currency. Non-IFRS operating profitability improved 11 per cent to €313 million.
Global services net sales increased by 12 per cent year-on-year, primarily due to growth in network implementation, care, planning and optimisation and, “to a lesser extent”, systems integration activities. Mobile broadband sales increased 3 per cent year-on-year, which was attributed to growth in overall revenue technologies and, in particular, LTE.
Regionally, China led the way with year-on-year growth of 24 per cent to €378 million, with MEA not far behind with 22 per cent growth to €294 million. However, there was a slowdown in Asia Pacific – Nokia’s biggest region – of 7 per cent to €766 million, due to lower sales in Japan, Indonesia and South Korea.
Sales for HERE increased 25 per cent to €290 million, with the company noting a “24 per cent growth in new vehicle licences for embedded navigation systems”. It also shifted to an operating profit (non-IFRS) of €27 million, compared with breakeven last year.
Suri said: “Our strategic review of the business is now in an advanced stage, and I would like to reiterate that our focus is on what is in the best interest of shareholders and the long term future of HERE”.
According to recent reports, a consortium of German car makers is in pole position to acquire the business.
Nokia Technologies saw a 31 per cent increase in revenue to €193 million and a 17 per cent increase in operating profit to €112 million, which was attributed to higher intellectual property licensing income from existing and new licensees and non-recurring net sales.
And the company also benefitted from a €69 million operating profit in its Group Common Functions segment, generated via a €110 million gain related to investments made from Nokia’s venture funds.
On a group level, the company reported a profit for the period of €347 million, compared with a prior year profit of €2.51 billion, on sales of €3.21 billion, up 9.1 per cent.
However, in the prior year period, the company reported a €2.54 billion profit from discontinued operations, following the sale of its Devices & Services unit to Microsoft – a deal of which Nokia certainly seemed to be on the better end.
Taking profit from continuing operations, Nokia’s current €351 million compared with a prior-year loss of €28 million.