Nokia Reports Almost Flat Sales in the First Quarter

Nokia Reports Almost Flat Sales in the First Quarter
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During the first quarter of 2022, Nokia saw minimal growth in sales compared with the same period last year. Supply chain problems and the war in Ukraine resulted in a one percent rise in sales to €2.3 billion.

Mobile Networks declined 4% due to supply chain constraints while demand remained strong. Nokia Technologies declined 17% as licenses that expired in 2021 have not yet been renewed. Network Infrastructure grew 9% driven by strong demand in both Fixed and Submarine Networks while Cloud and Network Services also performed well growing 5% with strength in Core Networks.

Both reported and comparable basis gross margins expanded (+270bps and +250bps respectively) despite component cost inflation. The company said that this is the result of their improved cost competitiveness. Comparable operating margin was flat at 10.9% as improved gross margins were offset by lower other operating income and higher R&D investments. The reported operating margin fell 190bps to 6.6% primarily due to a €104 million provision related to Russia.

“I am pleased with our start to 2022. Overall, Q1 was a strong start for the year both in terms of net sales and profitability. The demand environment remains strong and while supply chain and inflation challenges remain, we are confident we can deliver our 2022 outlook and continue to make good progress towards our long-term targets,“ said Pekka Lundmark, Nokia CEO.