Nokia reported a better second quarter compared to Q1, with revenues up 7 percent and the operating loss reducing. The network equipment supplier said the strong quarter was driven by 5G demand and solid operational execution, and the company maintained its outlook for full-year results.
Net sales rose 7 percent, or 5 percent at constant currency rates, to USD 5.313 billion. Nokia said it saw growth in four out of six regions and across all customer types. Sales were supported by the strategic expansion areas Software and Enterprise, "excellent momentum" in the IP Routing business and 5G business, with the portfolio reaching 45 commercial 5G deals and nine live networks.
The operating loss narrowed to USD 57 million from USD 221 million a year ago, due to a strong improvement at the Networks and Software divisions. Adjusted operating profit, excluding restructuring charges, was up 35 percent to USD 451 million, good for a margin of 7.9 percent. The net loss reduced to USD 0.03 per share from USD 0.05 in Q2 2018.
Better market outlook
Nokia maintained its outlook for an adjusted operating margin of 9-12 percent over the full year and slightly positive cash flow. Seasonality is expected to mean a weaker Q1 and Q3 and stronger Q2 and Q4, with an especially poor Q1 and particularly strong Q4.
The company upgraded its outlook for the overall market in 2019 to slight growth, and Nokia still expects to outperform the market. The company noted this will require tight execution in the second half after the slow start to the year. Other risks include the global trade tension and challenges in the Chinese market.
Nokia confirmed a EUR 0.05 dividend, as it moves to quarterly payments this year. This will cost in total around EUR 300 million in Q3.
