Post Earnings Coverage as Nokia Sees Lower than Expected Drop in Sales
Upcoming AWS Coverage on Ericsson Post-Earnings Results
LONDON, UK / ACCESSWIRE / November 7, 2016 / Active Wall St. announces its post-earnings coverage on Nokia Corp. (NYSE: NOK). The company released its interim report for third quarter 2016 and January-September 2016 on October 27, 2016. Nokia reported a smaller decline in sales than analysts forecasted. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Nokia's competitors within the Communication Equipment space, Telefonaktiebolaget LM Ericsson (NASDAQ: ERIC), reported on October 21, 2016, its third quarter results 2016. AWS will be initiating a research report on Ericsson in the coming days.
Today, AWS is promoting its earnings coverage on NOK; touching on ERIC. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=NOK
http://www.activewallst.com/registration-3/?symbol=ERIC
Earnings Reviewed
For the three months ended on September 30th, 2016, Nokia reported that sales dropped approximately 6% on a pro-forma basis to € 6.0 billion ($6.5 billion) compared with the average analysts' estimates of €5.86 billion. It is the third quarterly net loss for the telecom equipment company. Nokia posted adjusted earnings of € 0.4 per share compared to earnings of €0.08 ($0.9) per share in the year ago period, that matched market estimates. For Q3 2016, Nokia's operating profit slumped 18% to € 556 million, but that figure was buoyed by a one-off patent licensing payment.
During Q3 2916, quarterly adjusted gross margin was 39.7% compared with 37.7% in the year earlier quarter. Operating margin decreased 140 basis points (bps) to 9.3% on a year-over-year basis. In Q3 2016, Nokia generated net cash from operating activities of €230 million as against €460 million at the end of 2015.
CFO Resigns
In a separate press release on the same day, Nokia announced that Timo Ihamuotila, Chief Financial Officer of Nokia, has resigned from the company to join ABB in Switzerland as Chief Financial Officer and a member of the Executive committee. Ihamuotila will continue in his current role as Nokia's CFO and as a member of the company's Group Leadership Team until December 31, 2016, and will remain as an advisor to the company until February 28, 2017. Kristian Pullola, who currently is Nokia's Senior Vice President, Corporate Controller, has been appointed as Chief Financial Officer and member of the Group Leadership Team as of January 1, 2017.
As a result of this change, effective from January 1, 2017, the Nokia Group Leadership Team will consist of the following members: Rajeev Suri, Kristian Pullola, Samih Elhage, Federico Guillen, Basil Alwan, Bhaskar Gorti, Hans-Jurgen Bill, Kathrin Buvac, Ashish Chowdhary, Barry French, Marc Rouanne and Maria Varsellona.
Once known for its mobile phones, Nokia sold the handset business to Microsoft (MSFT.O) in 2014, leaving it with the networks business and a portfolio of technology patents.
Nokia's Networks business
Nokia's Q3 2016 network sales tumbled 12% from a year ago to € 5.32 billion against an average expectation of € 5.39 billion, with revenue declining 12% in all geographic regions. The company noted that consistent with its outlook for the wireless infrastructure market, net sales were weak in Mobile Networks within Ultra Broadband Networks, and accounted for approximately 80% of the overall decrease in Nokia's Networks business. IP Networks and Applications also contributed to the decrease. This was partially offset by growth in Fixed Networks within Ultra Broadband Networks.
Nokia Technologies
Nokia reported that its net sales from the Technologies segment more than doubled by 109% to €353 million (approximately $385 million) during Q3 2016, while operating profit soared 168%. The division's gross margin narrowed to 97.2% compared with 99.2% in Q3 2015. For Group Common and Other Nokia's net sales surged 41% to €298 million (approximately $325 million). Segmental gross margin was 15.9%.
Outlook
Nokia completed the takeover of Alcatel-Lucent in January 2016; the company continues to expect total annual cost savings of approximately €1.2 billion till 2018, excluding Nokia Technologies. For 2016, capital expenditure outlook for the company has been lowered to approximately €550 million from the previous guidance of €650 million. The company expects net sales in its primary networks division to decline in 2016 due to a declining wireless infrastructure market. Segmental operating margin is still forecasted in the band of 7%–9% for 2016.
Stock Performance
At the close of trading session on November 04, 2016, Nokia's stock price dropped 1.82% to end the day at $4.31. A total volume of 12.41 million shares were exchanged during the session, which was above the 3-month average volume of 12.13 million shares. The stock currently has a market cap of $24.15 billion. The company's shares have a dividend yield of 6.73%.
Active Wall Street:
Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.
PRESS RELEASE PROCEDURES:
The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.
NO WARRANTY
AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.
NOT AN OFFERING
This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.
CONTACT
For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:
Email: info@activewallst.com
Phone number: 1-858-257-3144
Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom
CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
SOURCE: Active Wall Street
