Nokia already pre-announced its Q2 25 results, and a guidance cut earlier this week so the main news from today''s full release is where the weakness in the qtr came from (mobile) and some encouraging commentary regarding Q4 25. We see this as slightly reassuring.
What happened?
Financial highlights
Revenues EUR4.55bn (1.8% y/y vs. prior qtr -6% y/y; 3.6% q/q vs prior qtr -26.6% q/q), -5.6% vs cons (EUR4.81bn)
GM EUR1.82bn (40.1% GM ie -3.2pp y/y), -13.4% vs cons (EUR2.16bn)
EBIT EUR0.08bn (1.8% margin ie -7.7pp y/y), -80.5% vs cons (EUR0.42bn). Operating profit in the quarter was impacted by a non-cash negative impact to venture funds of EUR 50 million which included a EUR 60 million negative currency revaluation. Comparable operating profit was around EUR301m.
EPS EUR0.02/sh (-200% y/y),-41.6% vs cons (EUR0.05/sh)
FCF EUR88m, -72.5% vs consensus (EUR321m)
Net cash EUR2.9bn, vs cons EUR2.6bn
Divisional highlights
MN revenues EUR1.73bn, -12.1% y/y (9.6% y/y prior qtr), -9.9% vs cons. MN EBIT EUR77m (4.4% margin), 1% vs cons
NI revenues EUR1.9bn, 25.1% y/y (3.6% y/y prior qtr), -0.8% vs cons. NI EBIT EUR109m (5.7% margin), -40% vs cons
Cloud revenues EUR0.56bn, -9.4% y/y (-13% y/y prior qtr), -1.9% vs cons. Cloud EBIT EUR9m (1.6% margin), 245% vs cons
Tech revenues EUR0.36bn, 0.3% y/y (-51.3% y/y prior qtr), -0.1% vs cons. Tech EBIT EUR255m (71.4% margin), -2% vs cons
Note we use Bloomberg consensus
BNPP Exane View:
Nokia already pre-announced its results and guidance earlier this week so the main incremental points are explaining where the rev and operating profit miss came from, plus some of the comments from the CEO commentary
From a revenue point of view the main issue appears to have been the MN segment where revenues were 10% below consensus. This fits our view from y''day that this was the main driver behind the disappointing result. At the operating profit level Infinera was a EUR-20m drag on earnings which likely was not captured in results...
