Send me real-time posts from this site at my email
Zacks

Nokia (NOK) Beats Q2 Earnings and Revenue Estimates

Nokia Corporation NOK reported healthy second-quarter 2022 results, wherein both the bottom and the top lines beat the Zacks Consensus Estimate.

Net Income

Profit (from continuing operations) in the quarter was €467 million ($497.5 million) or €0.08 (8.5 cents) per share compared with €350 million or €0.06 per share in the prior-year quarter.

Comparable profit came in at €585 million ($623.2 million) or €0.10 (11 cents) per share, up from €539 million or €0.09 per share in the year-ago quarter. The improvement reflects an increase in net sales. The bottom line beat the Zacks Consensus Estimate by 1 cent.

Nokia Corporation Price, Consensus and EPS Surprise

Nokia Corporation price-consensus-eps-surprise-chart | Nokia Corporation Quote

Revenues

On a constant currency basis, quarterly net sales improved 10.5% year over year to €5,873 million ($6,256.5 million), driven by growth in Mobile Networks and Network Infrastructure. The top line beat the consensus estimate of $6,073 million.

Segment Results

Net sales in Mobile Networks increased 9% year over year to €2,593 million ($2,762.3 million) due to limited impact from Covid-19-related lockdowns in China. The segment’s gross margin fell 70 basis points (bps) to 40.2%. Operating margin was 11.2%, up from 10.5%.

Network Infrastructure sales were up 21% year over year to €2,153 million ($2,293.6 million), as the business continued to benefit from strong demand in Fixed Networks and Submarine Networks. Gross margin increased 10 bps to 35.4%. Operating margin was up 240 bps to 11.5%.

Cloud and Network Services sales were up by 7% year over year at €753 million ($802.17 million), due to growth in Enterprise Solutions and Cloud and Cognitive services. Gross margin soared 150 bps to 37.2%. Operating margin fell 210 bps to a negative 0.7%.

Nokia Technologies sales declined 24% year over year to €305 million ($324.91 million) due to expiry of two licensing agreements that ended in 2021, which are in the process of renewal, along with the expiration of a patent licensing agreement with a company that has exited the smartphone market. Gross margin fell 10 bps to 99.7%. Operating margin declined 1170 bps to 71.1%.

Sales in Group Common and Other grew 24% year over year to €77 million ($82.03 million), as Radio Frequency Systems witnessed strong growth in North America. Gross margin was negative 5.2%, down 40 bps.

Other Details

Cost of sales increased to €3,512 million from €3,133 million in the prior-year quarter. Gross profit grew 8.4% to €2,361 million. Operating profit was €564 million compared with €484 million a year ago.

Cash Flow & Liquidity

During the second quarter, Nokia used €43 million of cash for operating activities compared with €106 million generated in the year-ago quarter.

As of Jun 30, 2022, the company had €5,457 million ($5,702.3 million) in cash and cash equivalents with €4,424 million ($4,622.9 million) of long-term liabilities.

Outlook

For 2022, Nokia expects net sales between €23.5 billion and €24.7 billion. Comparable operating margin is estimated to be between 11% and 13.5%. Free cash flow is projected in the 25-55% range of conversion from comparable operating profit.

Zacks Rank & Stocks to Consider

Nokia currently carries a Zacks Rank #3 (Hold). You can see https://www.zacks.com/stocks/buy-list/?ADID=zp_1link&ICID=zp... _1link">the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


Equinor ASA EQNR, sporting a Zacks Rank #1, has a long-term earnings growth expectation of 49.4% and delivered an earnings surprise of 5.8%, on average, in the trailing four quarters. Over the past year, the stock has gained 78.8%.

Earnings estimates for the current year have moved up 152.0% since July 2021. Equinor’s primary strategy is to capitalize on the renewable energy space and align its operations with the Paris Climate Agreement.

Turning Point Brands, Inc. TPB, sporting a Zacks Rank #1, is another key pick for investors. It delivered an earnings surprise of 34.0% in the previous quarter and a stellar earnings surprise of 23.2%, on average, in the trailing four quarters.

Earnings estimates for the current year have moved down by 11.6% since July 2021. Turning Point Brands is focused on manufacturing, marketing and distributing branded consumer products.

Liberty Energy Inc. LBRT has a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for its current-year earnings has been revised 42.9% upward since July 2021.

Liberty Energy recorded a trailing four-quarter negative earnings surprise of 55.1%, on average. It has soared 40.3% in the past two years.

Note: €1 = $1.065295 (period average from Apr 1, 2022 to Jun 30, 2022)
         €1 = $1.044949 (as of Jun 30, 2022)


5 Stocks Set to Double

Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Nokia Corporation (NOK): Free Stock Analysis Report
 
Turning Point Brands, Inc. (TPB): Free Stock Analysis Report
 
Liberty Energy Inc. (LBRT): Free Stock Analysis Report
 
Equinor ASA (EQNR): Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue