Nokia Q1 2015 results published
Nokia has published its interim results for the first quarter of 2015. With the mobile phone division having been part of Microsoft for some months now, this leaves the Nokia Networks Nokia Technology as the two elements of the company.
There was strong year on year sales growth for both divisions but there was weak profitability within Nokia Networks but this was compensated by good performance in Nokia Technologies
The Nokia Networks division of the company saw 15% net sales growth in four out of its six regions. Also the non-IFRS, International Financial Reporting Standards, operating margin declined from 9.3% to only 3.2%. The company stated that this 61% year on year decline in operating profit resulted chiefly from the lower level of software sales, lower levels of system integration and the short term impact of strategic entry deals. There were also impacts from exchange rate variations and the investment in new technology including 5G.
The recently announced acquisition of Alcatel Lucent is obviously starting to have an impact, but the long term gains certainly seem to be promising as the combined entity will be able to have a much large presence in the market than the two individual companies.
Nokia HERE, the division that caters for mapping solutions saw a 25% year-on-year growth in net sales, with 29% year-on-year increase in sales of new vehicle licenses for embedded navigation systems. Also the figures showed that there was a 90% year-on-year growth in non-IFRS operating profit, with non-IFRS operating margin expanding to 7.3% from 4.8%.
Nokia Technologies, the area of the company that deals with the technologies and licensing saw a major level of growth both in terms of turnover and profit. There was a 103% year-on-year growth in net sales and 124% growth in non-IFRS operating profit. The company stated that this was primarily due to non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested intellectual property rights, and intellectual property rights divested in the first quarter 2015. In addition, net sales and non-IFRS operating profit benefitted from higher intellectual property licensing income from existing licensees.