Nokia reported a return to sales growth in the first quarter, with revenues up 3 percent to EUR 5.1 billion and growing 9 percent on a constant currency basis. The adjusted operating margin improved to 10.9 percent from 2.4 percent a year ago, and CEO Pekka Lundmark said the company has a good chance to achieve the high end of its targeted range of 7-10 percent over the full year.
Growth in Q1 was supported by the company's expansion in the enterprise market, where sales rose 14 percent to EUR 354 million. Revenues increased 1 percent in the core business for telecom operators, to EUR 4.1 billion, with a drop in Mobile Networks offset by growth in other Network Infrastructure. Licensing revenues also increased 5 percent to EUR 365 million.
From a regional perspective, the increase in constant currency sales came mainly in North America and Greater China. Net sales in North America increased 23 percent excluding currency effects, primarily due to Network Infrastructure. Net sales in Greater China also increased 23 percent, led by Mobile Networks.
The bottom line was a net profit of EUR 263 million, compared to a loss of EUR 115 million a year ago. Nokia also generated positive free cash flow, for a fourth consecutive quarter, and the net cash position improved by EUR 1.2 billion to EUR 3.7 billion at the end of March.
Nokia maintained its outlook for positive cash flow over the full year and slightly lower sales of EUR 20.6-21.8 billion. Seasonality is expected to be slightly less pronounced this year, and the company is also weathering the semiconductor shortages well. The medium-term targets for 2023 also were upheld.
