Nokia's Q4 Earnings Beat Estimates on Strong Revenue Growth

Nokia Corporation NOK reported strong fourth-quarter 2024 results, with both top and bottom lines beating the respective Zacks Consensus Estimate. The company reported a top-line expansion year over year, primarily driven by solid traction in several segments.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Management’s cost discipline initiatives and growth in Nokia Technologies improved the gross margin. Improvement in profitability and strong growth in free cash flow are tailwinds.NOK’s Net IncomeNokia reported a net income of €813 million ($867.2 million) or €0.15 (16 cents) per share in the fourth quarter against a loss of €33 million or €0.01 per share in the year-ago quarter. Top-line expansion and lower income tax expenses boosted the net income.Comparable profit was €977 million ($1.04 billion) or €0.18 (19 cents) per share, up from €555 million or €0.10 per share in the year-earlier quarter. The bottom line beat the Zacks Consensus Estimate of 14 cents.For 2024, Nokia reported a net income of €1.28 billion or €0.23 per share compared with €679 million or €0.12 in 2023. Comparable profit was €2.17 billion or €0.39 per share, up from €1.59 billion or €0.28 per share in the previous year.Nokia Corporation Price, Consensus and EPS Surprise Nokia Corporation price-consensus-eps-surprise-chart | Nokia Corporation QuoteNOK’s RevenuesQuarterly net sales were €5.98 billion ($6.38 billion), up 10% from €5.41 billion in the year-ago quarter. Healthy demand in multiple segments supported the top line. Revenues surpassed the Zacks Consensus Estimate of $6.23 billion.In 2024, Nokia registered €19.22 billion in revenues, down from €21.13 billion in 2023.NOK’s Segment ResultsNet sales from Network Infrastructure totaled €2.03 billion ($2.17 billion), up from €1.71 billion in the year-ago quarter. The top line beat our revenue estimate of €2.01 billion. At cc, IP Networks recorded 24% growth year over year, owing to strength in the North America’s region, with healthy demand from webscale and enterprise customers. Revenues from Optical Networks improved 7% year over year on a cc basis, backed by healthy traction in APAC (Asia-Pacific) region. Fixed Networks witnessed a 16% rise year over year at cc, driven by growing fixed wireless access deployments in India and incresing investments in North America.Mobile Networks generated revenues of €2.43 billion ($2.59 billion), down 1% year over year on a reported basis and 2% at cc. Net sales beat our estimate of €2.34 billion. Weakness in the APAC region hindered the top line in this segment. Healthy demand in North America and Europe partially reversed this trend.Net sales from Cloud and Network Services were €1.05 billion ($1.12 billion), up 8% year over year on a reported basis and 7% on a cc basis. Growth in Core Networks and Enterprise Campus Edge supported the top line in this segment. However, divestiture of Device Management and Service Management Platform business impeded net sales growth. The top line in this segment beat our revenue estimate of €1.02 billion.Nokia Technologies contributed €463 million ($493 million) compared with €251 million in the year-ago quarter. Net sales increased 84% on a reported basis and 85% at cc. This uptick was mainly driven by catch-up payments, new deal wins and renewals of previously signed smartphone licensing agreements. The top line also benefited from positive trends in the automotive, consumer electronics, multimedia and IoT space.Region-wise, net sales from the EMEA region increased to €2.431 billion from €2.178 billion in the year-earlier quarter. Growth in Nokia Technologies, Network Infrastructure and Mobile Networks led to higher revenues in this region. Revenues in the APAC region improved to €1.47 billion, up 4% at cc year over year. Sales rose 20% at cc in India, due to Network infrastructure growth.Americas witnessed 11% growth at cc to €2.07 billion. Strong growth in IP Networks in the Network Infrastructure segment, along with double-digit growth in the Mobile Networks and Cloud and Network Services segments, led to higher revenues in the region.NOK’s Other DetailsIn the December quarter, the comparable gross margin increased to 47.2% from 44.7% in the year-ago quarter. Strong contribution from Nokia Technologies boosted the gross margin. The comparable operating profit increased 38% year over year to €1.14 billion ($1.21 billion). Comparable operating margin improved to 19.1% from 15.3%.NOK’s Cash Flow & LiquidityIn the December quarter, Nokia generated €209 million ($223 million) net cash from operating activities compared with €1.87 billion in the prior-year quarter. In 2024, Nokia generated €2.49 billion in cash from operations compared with €1.31 billion in 2023.As of Dec. 31, 2024, the company had €6.62 billion ($6.88 billion) in cash and cash equivalents, with long-term interest-bearing liabilities of €2.91 billion ($3.03 billion) compared with respective figures of €6.23 billion and €3.63 billion in 2023.Outlook of NOKFor 2025, Nokia expects a comparable operating margin in the range of €1.9-€2.4 billion. Free cash flow is estimated within 50-80% of comparable operating profit. Capital expenditure is estimated to be €550 million.Management expects that solid 5G Core momentum and healthy traction in the Enterprise Campus Edge business will be key growth drivers for Cloud and Network Services segment. Network Infrastructure segment will likely benefit from healthy demand trends in the second half of the current fiscal. It also expects largely stable sales in the Mobile Networks, backed by demand recovery in multiple end markets.NOK’s Zacks Rank & Stocks to ConsiderNokia currently carries a Zacks Rank #3 (Hold).Here are some better-ranked stocks that investors may consider.Keysight Technologies, Inc. KEYS has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications, and rising adoption of driver-assistance systems globally.InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions, used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.Zillow Group, Inc. ZG sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 9.38%. ZG delivered an earnings surprise of 25.47%, on average, in the trailing four quarters. The company is witnessing solid momentum in rental revenues, driven by growth in multi and single-family listings, which is a positive factor.Note: €1 = $1.06667 (period average from Oct. 1, 2024, to Dec. 31, 2024)         €1 = $1.03864 (as of Dec. 31, 2024)5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Nokia Corporation (NOK): Free Stock Analysis Report InterDigital, Inc. (IDCC): Free Stock Analysis Report Keysight Technologies Inc. (KEYS): Free Stock Analysis Report Zillow Group, Inc. (ZG): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks