Nokia Reports Q3 2024 Financial Results
Nokia Corporation has published its earnings report for the third quarter of 2024. Below is a summary of key financial details and insights from the report.
Financial Metrics Summary
| Metric | Q3 2024 | Year-over-Year Change | Consensus Estimate | Comparison to Consensus |
|---|---|---|---|---|
| Total Revenue | USD 5.15B | -7% | USD 5.34B | Missed |
| Free Cash Flow | EUR 621M | Not Provided | Not Provided | Not Provided |
Nokia reported a total revenue of USD 5.15 billion for Q3 2024, reflecting a 7% decline from the same quarter last year, attributed primarily to decreased sales in India. The company's performance fell short of the consensus estimate of USD 5.34 billion. Despite the revenue decline, Nokia achieved a significant improvement in its gross margin, increasing 490 basis points to 45.7%, driven by better product and regional mix.
Revenue Performance by Segment
| Segment | Major Highlights |
|---|---|
| Network Infrastructure | Fixed Networks grew 9%, IP Networks grew 6% |
| Mobile Networks | Secured several important deals |
| Cloud and Network Services | Strong momentum in 5G Core |
| Nokia Technologies | Stability post-smartphone renewal cycle |
Nokia's Network Infrastructure segment reported growth with Fixed Networks up 9% and IP Networks up 6%, which is seen as a positive turnaround for the company. However, the Mobile Networks segment faced challenges, though it maintained confidence in its competitive position.
Key Developments and Highlights
- Return to net sales growth in Network Infrastructure.
- Significant improvement in group-level gross margin.
- Nokia's acquisition of Infinera, valued at USD 1.7 billion, is set to bolster Optical Networks.
- Continued investments in expanding presence in the data center and defense markets with 5G technology.
Executive Commentary
Pekka Lundmark, President and CEO, expressed optimism about the company's direction, highlighting growth in Network Infrastructure and strong order intake. He acknowledged challenges in Mobile Networks but emphasized improvements in gross margin and market position.
Dividends and Share Repurchase Program
- The Board announced a dividend of EUR 0.03 per share, to be distributed on 31 October 2024.
- The ongoing share buyback program aims to repurchase EUR 600 million worth of shares by the end of the year. As of 30 September 2024, 84,295,899 shares had been repurchased.
Outlook and Stock Performance
Nokia's outlook for the full year 2024 remains a comparable operating profit in the range of EUR 2.3 to 2.9 billion, though tracking within the lower half. Despite a slower net sales recovery than expected, improvements in gross margin and cost management are positive indicators.
Following the earnings release, Nokia's stock experienced a decline of approximately 5.61%.
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