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Nokia (NOK) Q4 Earnings Beat Estimates, Revenues Down Y/Y
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Nokia Corporation (NOK - Free Report) reported mixed fourth-quarter 2021 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same.
Net Income
Reported profit (from continuing operations) in the quarter was €682 million or €0.12 per share against a loss of €2,700 million or loss of €0.48 per share in the prior-year quarter. The improvement was primarily driven by lower income tax expense.
In 2021, reported profit was €1,654 million or €0.29 per share against a loss of €2,513 million or loss of €0.45 per share in 2020.
Quarterly comparable profit came in at €731 million ($835.9 million) or €0.13 (15 cents) per share, down from €784 million or €0.14 per share in the year-ago quarter. This reflects a decline in operating profit and a net negative fluctuation in financial income and expenses. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Revenues
On a constant currency basis, quarterly net sales declined 2.1% year over year to €6,414 million ($7,334.8 million), primarily due to Mobile Networks. Reported net sales also decreased 2.1%. The top line lagged the consensus estimate of $7,399 million. In 2021, reported net sales increased 1.6% year over year to €22,202 million.
Quarterly Segment Results
On a constant currency basis, net sales in Mobile Networks fell 16% year over year to €2,761 million. This reflects less pronounced seasonality with lower net sales in both radio access products and services. Net sales were adversely impacted by supply chain constraints. North America drove the majority of the decline, as business was affected by earlier communicated market share loss and price erosion. The segment’s gross margin declined 160 basis points (bps) to 37.1%. Operating margin was flat at 8.6%.
Network Infrastructure sales were up 10% year over year to €2,254 million. This reflects strong growth in Fixed Networks, growth in Submarine Networks and Optical Networks and a decline in IP Networks. The modest decline in IP Networks, due to supply chain constraints, was in comparison to a strong year-ago quarter. Gross margin decreased 100 bps to 33.6%. Operating margin surged 1,210 bps to 6.9%.
Cloud and Network Services sales were down 3% year over year to €964 million. This reflects slight declines in both Cloud and Cognitive Services and Core Networks, largely offset by double-digit growth in Enterprise Solutions, particularly in Europe. Gross margin soared 1,350 bps to 40.4%. Operating margin improved 2,050 bps to 14%.
Nokia Technologies sales declined 4% year over year to €368 million due to the absence of catch-up net sales from a renewed patent license agreement, which benefited the year-ago quarter. Gross margin improved 20 bps to 99.7%. Operating margin declined 350 bps to 76.6%.
Sales in Group Common and Other grew 23% year over year to €74 million, driven by Radio Frequency Systems. Gross margin was a negative 4.1%, up 440 bps.
Other Details
Cost of sales decreased to €3,880 million from €4,000 million in the prior-year quarter. Gross profit fell 0.7% to €2,534 million. Operating profit was €740 million compared with €441 million a year ago.
Cash Flow & Liquidity
In 2021, Nokia generated €2,625 million net cash from operating activities compared with €1,759 million in 2020.
As of Dec 31, 2021, the company had €6,691 million ($7,588.9 million) in cash and cash equivalents with €4,537 million ($5,145.9 million) of long-term liabilities.
2022 Guidance
For full-year 2022, Nokia expects net sales between €22.6 billion and €23.8 billion. Comparable operating margin is estimated between 11% and 13.5%. Free cash flow is projected in the 25-55% range of conversion from comparable operating profit.
Vocera Communications, Inc. is a better-ranked stock in the broader Zacks Computer and Technology sector that sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 6.2% upward over the past 60 days.
Vocera Communications delivered a trailing four-quarter earnings surprise of 109.6%, on average. The stock has returned 76.5% in the past year.
SeaChange International, Inc. (SEAC - Free Report) carries a Zacks Rank #2 (Buy). The consensus estimate for current-year earnings has been revised 10% upward over the past 60 days.
SeaChange International delivered a trailing four-quarter earnings surprise of 37.2%, on average. The stock has inched up 4.2% in the past year.
Qualcomm, Inc. (QCOM - Free Report) , carrying a Zacks Rank #2, is another solid pick for investors. The consensus estimate for current-year earnings has been revised 0.7% upward over the past 60 days.
Qualcomm delivered a trailing four-quarter earnings surprise of 11.2%, on average. It has appreciated 27.2% in the past year.
Conversion rate used:
€1 = $1.143556 (period average from Oct 1, 2021 to Dec 31, 2021)
€1 = $1.134199 (as of Dec 31, 2021)
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Nokia (NOK) Q4 Earnings Beat Estimates, Revenues Down Y/Y
Nokia Corporation (NOK - Free Report) reported mixed fourth-quarter 2021 results, wherein the bottom line beat the Zacks Consensus Estimate but the top line missed the same.
Net Income
Reported profit (from continuing operations) in the quarter was €682 million or €0.12 per share against a loss of €2,700 million or loss of €0.48 per share in the prior-year quarter. The improvement was primarily driven by lower income tax expense.
In 2021, reported profit was €1,654 million or €0.29 per share against a loss of €2,513 million or loss of €0.45 per share in 2020.
Quarterly comparable profit came in at €731 million ($835.9 million) or €0.13 (15 cents) per share, down from €784 million or €0.14 per share in the year-ago quarter. This reflects a decline in operating profit and a net negative fluctuation in financial income and expenses. The bottom line beat the Zacks Consensus Estimate by 3 cents.
Revenues
On a constant currency basis, quarterly net sales declined 2.1% year over year to €6,414 million ($7,334.8 million), primarily due to Mobile Networks. Reported net sales also decreased 2.1%. The top line lagged the consensus estimate of $7,399 million. In 2021, reported net sales increased 1.6% year over year to €22,202 million.
Quarterly Segment Results
On a constant currency basis, net sales in Mobile Networks fell 16% year over year to €2,761 million. This reflects less pronounced seasonality with lower net sales in both radio access products and services. Net sales were adversely impacted by supply chain constraints. North America drove the majority of the decline, as business was affected by earlier communicated market share loss and price erosion. The segment’s gross margin declined 160 basis points (bps) to 37.1%. Operating margin was flat at 8.6%.
Network Infrastructure sales were up 10% year over year to €2,254 million. This reflects strong growth in Fixed Networks, growth in Submarine Networks and Optical Networks and a decline in IP Networks. The modest decline in IP Networks, due to supply chain constraints, was in comparison to a strong year-ago quarter. Gross margin decreased 100 bps to 33.6%. Operating margin surged 1,210 bps to 6.9%.
Cloud and Network Services sales were down 3% year over year to €964 million. This reflects slight declines in both Cloud and Cognitive Services and Core Networks, largely offset by double-digit growth in Enterprise Solutions, particularly in Europe. Gross margin soared 1,350 bps to 40.4%. Operating margin improved 2,050 bps to 14%.
Nokia Technologies sales declined 4% year over year to €368 million due to the absence of catch-up net sales from a renewed patent license agreement, which benefited the year-ago quarter. Gross margin improved 20 bps to 99.7%. Operating margin declined 350 bps to 76.6%.
Sales in Group Common and Other grew 23% year over year to €74 million, driven by Radio Frequency Systems. Gross margin was a negative 4.1%, up 440 bps.
Other Details
Cost of sales decreased to €3,880 million from €4,000 million in the prior-year quarter. Gross profit fell 0.7% to €2,534 million. Operating profit was €740 million compared with €441 million a year ago.
Cash Flow & Liquidity
In 2021, Nokia generated €2,625 million net cash from operating activities compared with €1,759 million in 2020.
As of Dec 31, 2021, the company had €6,691 million ($7,588.9 million) in cash and cash equivalents with €4,537 million ($5,145.9 million) of long-term liabilities.
2022 Guidance
For full-year 2022, Nokia expects net sales between €22.6 billion and €23.8 billion. Comparable operating margin is estimated 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 has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vocera Communications, Inc. is a better-ranked stock in the broader Zacks Computer and Technology sector that sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 6.2% upward over the past 60 days.
Vocera Communications delivered a trailing four-quarter earnings surprise of 109.6%, on average. The stock has returned 76.5% in the past year.
SeaChange International, Inc. (SEAC - Free Report) carries a Zacks Rank #2 (Buy). The consensus estimate for current-year earnings has been revised 10% upward over the past 60 days.
SeaChange International delivered a trailing four-quarter earnings surprise of 37.2%, on average. The stock has inched up 4.2% in the past year.
Qualcomm, Inc. (QCOM - Free Report) , carrying a Zacks Rank #2, is another solid pick for investors. The consensus estimate for current-year earnings has been revised 0.7% upward over the past 60 days.
Qualcomm delivered a trailing four-quarter earnings surprise of 11.2%, on average. It has appreciated 27.2% in the past year.
Conversion rate used:
€1 = $1.143556 (period average from Oct 1, 2021 to Dec 31, 2021)
€1 = $1.134199 (as of Dec 31, 2021)