Nokia (NOK, Financial) disclosed a slight decrease in first-quarter revenue, reporting EUR 4.39 billion compared to EUR 4.44 billion during the same period last year. This marks a 3% reduction in net sales. However, when adjusted for the one-time effects from last year's licensing agreements, sales experienced a 7% increase.
The company's operating margin faced pressure due to challenges from the previous year's results in Nokia Technologies and a specific charge in the Mobile Networks division. Despite these setbacks, Nokia reported improved profitability within its Network Infrastructure and Cloud and Network Services segments, highlighting areas of growth.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Nokia Oyj (NOK, Financial) is $5.58 with a high estimate of $7.00 and a low estimate of $3.80. The average target implies an upside of 4.99% from the current price of $5.31. More detailed estimate data can be found on the Nokia Oyj (NOK) Forecast page.
Based on the consensus recommendation from 9 brokerage firms, Nokia Oyj's (NOK, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Nokia Oyj (NOK, Financial) in one year is $4.24, suggesting a downside of 20.15% from the current price of $5.31. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Nokia Oyj (NOK) Summary page.
NOK Key Business Developments
Release Date: January 30, 2025
- Net Sales Growth: 9% growth in Q4 2024.
- Network Infrastructure Growth: 17% in Q4, with IP Networks growing 24%.
- Cloud and Network Services Growth: 7% in Q4, despite a 4 percentage point headwind from a prior disposal.
- Comparable Gross Margin: 47.2% in Q4 2024.
- Operating Margin: 19.1% in Q4 2024, highest since 2015.
- Free Cash Flow: EUR2 billion for the year.
- Net Cash Balance: EUR4.9 billion at year-end 2024.
- Mobile Networks Net Sales: Declined by 2% in Q4 2024.
- Cloud and Network Services Operating Margin: 22.4% in Q4 2024.
- Nokia Technologies Net Sales Growth: 85% in Q4 2024.
- Dividend Proposal: EUR0.14 per share for financial year 2024.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Nokia Oyj (NOK, Financial) reported a strong fourth quarter with a 9% growth in net sales.
- Network Infrastructure grew by 17% in Q4, with IP Networks being a standout performer with 24% growth.
- The company achieved a comparable gross margin of 47.2% and an operating margin of 19.1%, the highest since 2015.
- Nokia Technologies saw an impressive 85% growth in net sales in Q4 due to new deals and catch-up payments.
- The company generated a strong free cash flow of EUR 2 billion, ending the year with a net cash balance of EUR 4.9 billion.
Negative Points
- Mobile Networks experienced a 2% decline in net sales during the quarter.
- Gross margin for Mobile Networks declined slightly by 20 basis points to 38.1%.
- The company faces a 4 percentage point headwind in Mobile Networks from a customer decision made in 2023.
- Enterprise sales declined by 4% in constant currency, partly due to lumpiness in Webscale deals.
- The competitive environment remains challenging in Latin America, impacting market stability.
