Post Earnings Coverage as Nokia's Q1 Operating Margin Improved
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Upcoming AWS Coverage on ARRIS International Post-Earnings Results
LONDON, UK / ACCESSWIRE / May 8, 2017 / Active Wall St. announces its post-earnings coverage on Nokia Corp. (NYSE: NOK). The Company reported its first quarter fiscal 2017 (Q1 FY17) results on April 27, 2017. The Espoo, Finland-based Company's operating margin improved 20 basis points. Register with us now for your free membership at:
One of Nokia's competitors within the Communication Equipment space, ARRIS International PLC (NASDAQ: ARRS), released its Q1 2017 financial results after the market close on Wednesday, May 03, 2017. AWS will be initiating a research report on ARRIS International in the coming days.
Today, AWS is promoting its earnings coverage on NOK; touching on ARRS. Get our free coverage by signing up to:
In Q1 FY17, Nokia reported net sales of €5.38 billion, which came in 2% below the €5.51 billion reported in the year-ago comparable period. Excluding foreign translation loss, the Company's Q1 FY17 net sales was down by 4% y-o-y. Furthermore, the Company's non-IFRS net sales were down by 4% y-o-y to €5.39 billion.
The telecommunication equipment maker's loss from continuing operations narrowed to €435 million, or €0.08 loss per diluted share, in Q1 FY17, from €712 million, or €0.11 loss per diluted share, in Q1 FY16. Meanwhile, the Company's reported non-IFRS profit from continuing operations in Q1 FY17 of €203 million, or €0.03 per diluted share, compared to €139 million, or €0.03 per diluted share.
Operational Metrics
During Q1 FY17, Nokia's non-IFRS gross profit stood at €2.20 billion compared to €2.23 billion in the prior year's same quarter. The Company's non-IFRS gross margin for the reported quarter was 40.8%, up from 39.7% in Q1 FY16. Non-IFRS operating profit also fell marginally during the reported quarter to €341 million from €345 million in the year ago comparable quarter. However, non-IFRS operating margin improved to 6.3% in Q1 FY17 from 6.1% in Q1 FY16.
Segment Results
During Q1 FY17, Nokia's Networks business' net sales fell 6% to €4.90 billion from €5.19 billion in Q1 FY16. The segment reported a gross profit of €1.94 billion, or 39.5% of segment net sales, compared to €2.01 billion, or 38.6% of segment net sales, in the last year's corresponding quarter. Additionally, the segment's operating profit came in at €324 million, or 6.6% of segment net sales, in Q1 FY17 compared to €337 million, or 6.5% of net sales, in the year ago same quarter.
Net sales at Nokia Technologies surged 25% from €198 million in Q1 FY16 to €247 million in Q1 FY17. The segment's gross profit for the reported quarter came in at €234 million, or 94.7% of segment net sales, versus €196 million, or 99.0% of segment net sales, in Q1 FY16. Furthermore, the segment's Q1 FY17 operating profit stood at €116 million, or 47.0% of segment net sales, compared to €106 million, or 53.5% of segment net sales, in the last year comparable quarter.
Group Common and Other's net sales increased 8% during Q1 FY17 to €254 million from €235 million in Q1 FY16. Gross profit for the reported quarter was flat at €27 million, or 10.6% of segment net sales, compared to €27 million, or 11.5% of segment net sales in the prior year's corresponding quarter. However, the segment reported operating loss of €99 million, which also came in flat with respect to operating loss posted in the year ago same quarter.
Balance Sheet
In the reported quarter, Nokia used €473 million in its operating activities compared to cash used in operating activities of €1.58 billion in the year ago same quarter. As on March 31, 2017, the Company had cash and cash equivalents balance of €6.99 billion compared to €9.34 billion in as on March 31, 2016. Furthermore, the Company's long-term interest-bearing liabilities increased to €4.11 billion as on March 31, 2017, from €4.00 billion as on March 31, 2016.
Stock Performance
At the close of trading session on Friday, May 05, 2017, Nokia's share price finished the trading session at $6.18, advancing 2.49%. A total volume of 30.49 million shares exchanged hands, which was higher than the 3 months average volume of 13.24 million shares. The stock has advanced 27.95% and 39.19% in the last three months and past six months, respectively. Furthermore, since the start of the year, shares of the Company have surged 28.48%. The stock currently has a market cap of $35.60 billion and has a dividend yield of 2.91%.
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