Nokia delivers strong Q2 results on solid 5G demand; reaffirms outlook

Shares of Nokia (NYSE: NOK) rose about 8% in the pre-market trading session after it reported strong second quarter 2019 results today. The Finnish smartphone maker’s non-IFRS earnings surged 67% year-over-year to EUR 0.05 per share, while revenue rose 7% (5% growth on constant currency basis) to EUR 5.69 billion for the recently ended quarter. Nokia reaffirmed its outlook for fiscal 2019 and fiscal 2020.

Nokia’s growth in the topline during the second quarter reflected the improved industry demand, The company’s sales grew across four out of six regions and all customer types.

Nokia maintained its full-year 2019 guidance, with seasonality characterized by weaker first and third quarters and stronger second and fourth quarters, with a particularly weak Q1 and an expected particularly strong Q4. The company expects full-year 2019 non-IFRS EPS to be in the range of EUR 0.25 – 0.29 and full-year 2020 non-IFRS EPS to be in the range of EUR 0.37 – 0.42.

Related: Nokia shares plunge after company warns of compliance issues

Nokia signed multiple 5G commercial agreements during the three months ended June 30, 2019 and the total number of 5G commercial agreements is now stands at 45. After Q2 closed, Nokia announced that China Unicom chose Nokia’s optical fronthaul solution to power its 4G and 5G networks in Beijing, supporting the operator’s commitment to deliver 5G in the 2019 timeframe.

In Q2 2019, net cash and current financial investments decreased sequentially by approximately EUR 1.5 billion. This decrease was primarily due to anticipated cash outflows including the payment of 2018 performance-related incentives to employees, payment of the quarterly dividend, as well as restructuring and associated cash outflows.

Nokia expects its most recent cost savings program to result in a net EUR 700 million reduction of non-IFRS operating expenses and production overheads in full year 2020 compared to full year 2018, of which EUR 500 million is expected to come from operating expenses and EUR 200 million is expected to come from cost of sales. The related restructuring charges are expected to total EUR 900 million.

Read: Comcast reports a rise in Q2 earnings and revenue

On July 25, 2019, the Board authorized EUR 0.05 per share as the second instalment of the dividend with a record date of July 30, 2019. This dividend is expected to be paid on or around August 8, 2019.

Nokia stock, which plunged to its 52-week low ($4.71) on NYSE in May, had given a negative return of 11% so far in this year and dropped 12% in the past 12 months.

We’re on Apple News! Follow us to receive the latest stock market, earnings and financial news at your fingertips