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Nokia's (NOK) Q3 Earnings Match Estimates, Revenues Rise
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Nokia Corporation (NOK - Free Report) reported relatively healthy third-quarter 2022 results, with revenues and earnings improving year over year despite supply chain constraints due to healthy demand trends. While the top line beat the Zacks Consensus Estimate, the bottom line matched the same.
Net Income
Profit from continuing operations was up 22% to €428 million ($431.3 million) or €0.08 per share (8.1 cents) from €351 million or €0.06 per share in the prior-year quarter.
Comparable profit came in at €551 million ($555.28 million) or €0.10 (10.1 cents) per share, up from €463 million or €0.08 per share in the year-ago quarter. The improvement reflects an increase in net sales. The bottom line matched the Zacks Consensus Estimate.
Nokia Corporation Price, Consensus and EPS Surprise
Quarterly revenues were up 16% year over year to €6,241 million ($6,289.5 million), driven by higher revenues from Mobile Networks and Network Infrastructure segments. The top line beat the Zacks Consensus Estimate of $6,271 million.
Segment Results
Mobile Networks contributed €2,851 million ($2,873 million) to the total revenues with year-over-year growth of 23% on a reported basis and 12% on a constant currency basis. The segment benefited from healthy customer demand, improved portfolio competitiveness, strong order backlog and continued investments in supply chain mechanism.
Network Infrastructure revenues totaled €2,211 million ($2,228 million), up 15% on a reported basis and 5% on a constant currency basis. IP Networks accounted for €773 million of the segment’s revenues with 16% year-over-year growth due to a continuous increase in Orders for FP5- based solutions. Optical networks revenues were up 9% to €451 million despite its decision to exit from Russia.
Cloud and Network Services accounted for €801 million ($807 million), with 7% growth on a reported basis and a decline of 3% on a constant currency basis. A decrease in core networks offset the growth in campus wireless.
The company generated €305 million ($307 million) in sales from Nokia Technologies, marking a 17% decline from the past year’s quarter. The fall in this segment’s operating margin was due to higher litigation costs and licensing expenses.
Region-wise, sales in Latin America shot up 40%, the most in any region. Sales in North America and Europe accounted for more than 60% of the total sales, with decent year-over-year growth in North America.
Cash Flow and Liquidity
Nokia generated €391 million from operating activities and used €458 million in investing activities and €236 million in financing activities. As of Sep 30, 2022, the company had €5,196 million ($ 5,338.6 million) cash and cash equivalents with long-term interest-bearing liabilities of €4,364 million ($4,483.7 million).
Outlook
Nokia has maintained its operating margin guidance at 11% to 13.5%.
Sierra Wireless , with a Zacks Rank #1, is a better-ranked stock. It has a long-term earnings growth expectation of 15%. It delivered an earnings surprise of 229.9%, on average, in the trailing four quarters.
Earnings estimates for the current year have moved up 4400% since October 2021. Sierra Wireless continues to launch innovative products for business-critical operations that require high security and optimum 5G performance.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It has a long-term earnings growth expectation of 25% and delivered a stellar earnings surprise of 81.9%, on average, in the trailing four quarters.
InterDigital is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets. The company aims to become a leading designer and developer of technology solutions and innovation for the mobile industry, IoT and allied technology areas. InterDigital’s global footprint, diversified product portfolio and ability to penetrate different markets are impressive.
Aviat Networks, Inc. (AVNW - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 23.3% upward since October 2021.
Aviat Networks pulled off a trailing four-quarter earnings surprise of 15.9%, on average. It has soared 158.3% in the past two years.
Note: €1 = $1.007771 (period average from Jul 1, 2022 to Sep 30, 2022) €1 = $1.027440 (as of Sep 30, 2022)
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Nokia's (NOK) Q3 Earnings Match Estimates, Revenues Rise
Nokia Corporation (NOK - Free Report) reported relatively healthy third-quarter 2022 results, with revenues and earnings improving year over year despite supply chain constraints due to healthy demand trends. While the top line beat the Zacks Consensus Estimate, the bottom line matched the same.
Net Income
Profit from continuing operations was up 22% to €428 million ($431.3 million) or €0.08 per share (8.1 cents) from €351 million or €0.06 per share in the prior-year quarter.
Comparable profit came in at €551 million ($555.28 million) or €0.10 (10.1 cents) per share, up from €463 million or €0.08 per share in the year-ago quarter. The improvement reflects an increase in net sales. The bottom line matched the Zacks Consensus Estimate.
Nokia Corporation Price, Consensus and EPS Surprise
Nokia Corporation price-consensus-eps-surprise-chart | Nokia Corporation Quote
Revenues
Quarterly revenues were up 16% year over year to €6,241 million ($6,289.5 million), driven by higher revenues from Mobile Networks and Network Infrastructure segments. The top line beat the Zacks Consensus Estimate of $6,271 million.
Segment Results
Mobile Networks contributed €2,851 million ($2,873 million) to the total revenues with year-over-year growth of 23% on a reported basis and 12% on a constant currency basis. The segment benefited from healthy customer demand, improved portfolio competitiveness, strong order backlog and continued investments in supply chain mechanism.
Network Infrastructure revenues totaled €2,211 million ($2,228 million), up 15% on a reported basis and 5% on a constant currency basis. IP Networks accounted for €773 million of the segment’s revenues with 16% year-over-year growth due to a continuous increase in Orders for FP5- based solutions. Optical networks revenues were up 9% to €451 million despite its decision to exit from Russia.
Cloud and Network Services accounted for €801 million ($807 million), with 7% growth on a reported basis and a decline of 3% on a constant currency basis. A decrease in core networks offset the growth in campus wireless.
The company generated €305 million ($307 million) in sales from Nokia Technologies, marking a 17% decline from the past year’s quarter. The fall in this segment’s operating margin was due to higher litigation costs and licensing expenses.
Region-wise, sales in Latin America shot up 40%, the most in any region. Sales in North America and Europe accounted for more than 60% of the total sales, with decent year-over-year growth in North America.
Cash Flow and Liquidity
Nokia generated €391 million from operating activities and used €458 million in investing activities and €236 million in financing activities. As of Sep 30, 2022, the company had €5,196 million ($ 5,338.6 million) cash and cash equivalents with long-term interest-bearing liabilities of €4,364 million ($4,483.7 million).
Outlook
Nokia has maintained its operating margin guidance at 11% to 13.5%.
Zacks Rank and Stocks to Consider
Nokia currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sierra Wireless , with a Zacks Rank #1, is a better-ranked stock. It has a long-term earnings growth expectation of 15%. It delivered an earnings surprise of 229.9%, on average, in the trailing four quarters.
Earnings estimates for the current year have moved up 4400% since October 2021. Sierra Wireless continues to launch innovative products for business-critical operations that require high security and optimum 5G performance.
InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1, is another key pick for investors. It has a long-term earnings growth expectation of 25% and delivered a stellar earnings surprise of 81.9%, on average, in the trailing four quarters.
InterDigital is focused on pursuing agreements with unlicensed customers in the handset and consumer electronics markets. The company aims to become a leading designer and developer of technology solutions and innovation for the mobile industry, IoT and allied technology areas. InterDigital’s global footprint, diversified product portfolio and ability to penetrate different markets are impressive.
Aviat Networks, Inc. (AVNW - Free Report) sports a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has been revised 23.3% upward since October 2021.
Aviat Networks pulled off a trailing four-quarter earnings surprise of 15.9%, on average. It has soared 158.3% in the past two years.
Note: €1 = $1.007771 (period average from Jul 1, 2022 to Sep 30, 2022)
€1 = $1.027440 (as of Sep 30, 2022)