Nokia Reports Q4 Earnings; Shares Fall

Nokia 8Hermann / Pixabay

The shares of Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) declined in the morning trading on Thursday after the company reported weak financial results for the fourth quarter. The stock price of the company declined by more than 9% to as low as $6.93 per share in New York.

Nokia financial results

The Finnish company reported that its revenue for the fourth quarter declined 21% from €4.41 billion to €3.47 billion. Its operating profit dropped 17% from €329 million to €274 million. Its earnings per diluted share fell from €0.10 to €0.08 per share.

Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) posted that the sales of NSN dropped 22% to €3.1 billion. The company explained that the decline was partly because of some divestments and its decision to avoid some less profitable contracts. The operating profit of the business declined 4% to €243 million, and the operating margin was 7.8%.

The Finnish company said its HERE business generated €254 million, down by 9%. Its operating profit and operating margin improved to €18 million and 7.1%, respectively.

The Advance Technologies business of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) delivered €121 million, a decline of 9%. Its operating profit and operating margin also fell to €65 million and 53.7%, respectively.

Profit margin forecast

Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) also predicted to deliver lower profit margins for its network equipment business, Nokia Solutions Network (NSN). The company estimated that the operating profit of its network business will decline 1% to 9% of sales for the current quarter from 11.2% in the previous quarter.

Sami Sarkamies, analyst at Nordea Bank AB (STO:NDA-SEK) in Helsinki, projected that the profit margin of the company’s network unit will be around 7.6%. According to Sarkamies, “The big question is, how do they plan to grow NSN’s margin from the first quarter while aggressively going after sales?”

Patent licensing

Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) projected that its income from patent licensing will increase to €600 million from its current annual rate of €500 million. Some analysts predicted that the company will generate higher profit from its patent licensing this year.

About the Author

Marie Cabural
Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.