Nokia officially reported on its second quarter today. Affected by COVID-19 and the performance of the Chinese market, Nokia’s second-quarter revenue was 5.092 billion euros, down 11% year-on-year. However, net profits achieved strong growth, reaching 99 million euros.
This compares to a loss of 193 million euros in the same period last year. In addition, data shows that Nokia’s 5G product shipments in Q2 also continued to climb, and it is expected to achieve a growth of more than 35% by the end of the year.
Rajeev Suri, President and CEO of Nokia said: “Despite the challenges of COVID-19, Nokia achieved strong growth in the second quarter. Profitability was better than expected, cash flow improved significantly, mobile business strength increased significantly, and earnings per share It also achieved year-on-year growth.”
As profitability was significantly better than market expectations and cash flow improved significantly, Nokia will have stronger financial strength by the end of the year. Nokia raised its 2020 full-year adjusted diluted earnings per share forecast to 0.25 euros; raised its full-year adjusted operating interest rate to 9.5%.
At the beginning of this year, Nokia said it will focus on mobile business and improve cash generation. “In these two areas, we continue to make good progress.” Rajeev Suri pointed out that Nokia’s free cash flow for the quarter was 265 million euros, compared with negative 1 billion euros a year ago.
At the end of the second quarter, Nokia had EUR 1.6 billion in net cash and EUR 7.5 billion in total cash. Taking into account the strong growth in the first half of the year, we expect full-year free cash flow in 2020 to perform better than previously predicted.
“In the second quarter, Nokia’s wireless product portfolio continued to evolve. The roadmap is constantly improving, costs are falling, and product performance is constantly improving.”
Rajeev Suri said that Nokia has a particularly strong product portfolio in 5G mid-band and has helped 55 Customers deploy proven products.
Rajeev Suri particularly emphasized that Nokia’s 5G product shipments continued to increase in Q2. “We believe that by the end of the year it is still expected to reach 35% or higher. Nokia now has 83 5G contracts.”
Nokia’s “excellent” performance in the Q2 quarter will also continue. Rajeev Suri pointed out that Nokia Software plans to accelerate its leadership in Open RAN in the next step.
Nokia is the only global supplier dedicated to O-RAN and commercial 5G Cloud-RAN networks. In addition, Nokia’s IP routing business has also expanded to the data center market.
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