Nokia (NYSE:NOK) Sales growth in Q1 2021 driving margin increase and strong cash generation

• Strong start to the year with constant currency net sales up 9% year-on-year, driven by strong growth in Network Infrastructure and solid growth in Mobile Networks; reported net sales increased 3%
• Enterprise constant currency net sales up 18% year-on-year, as we gained 63 new customers, more than doubling the number we added in Q1 2020; reported net sales increased 14%
• Comparable gross margin of 38.2% (reported 37.9%), reflecting improvements in Mobile Networks, mainly driven by 5G growth and favorable product and regional mix, and broad improvements across Network Infrastructure
• Comparable operating margin of 10.9% (reported 8.5%), with improvements in comparable operating profit across all business groups
• Comparable diluted EPS of EUR 0.07; reported diluted EPS of EUR 0.05
• Strong cash flow performance, driven by operating profit and good collection of receivables
• Solid liquidity position, with net cash of EUR 3.7bn and total cash of EUR 8.8bn
• Executing well on three-phased approach to achieve sustainable, profitable growth and technology leadership set out at Capital Markets Day
• Full year 2021 and 2023 outlook maintained

This is a summary of the Nokia Corporation financial report for Q1 2021 published today. Nokia only publishes a summary of its financial reports in stock exchange releases. The summary focuses on Nokia Group’s financial information as well as on Nokia’s outlook. The detailed, segment-level discussion will be available in the complete financial report hosted at www.nokia.com/financials. Investors should not solely rely on summaries of Nokia’s financial reports but should also review the complete reports with tables.

PEKKA LUNDMARK, PRESIDENT AND CEO, ON Q1 2021 RESULTS

We have delivered a robust start to the year with strong net sales, operating margin and cash flow. Today’s results demonstrate that we are on track to deliver on our three-phased plan to achieve sustainable, profitable growth and technology leadership as announced at our recent Capital Markets Day.

I was particularly pleased by strong sales growth across our Network Infrastructure business group driven by increasing demand for next generation connectivity; good progress in Mobile Networks in securing full portfolio competitiveness; continued double-digit sales growth with our Enterprise customers; double-digit sales growth in North America; and good net sales development for Nokia Technologies.

At this point we are maintaining our Outlook for the full year, as we want to see how 2021 continues to develop. The solid first quarter provides a good foundation for achieving the higher end of the 7 to 10% comparable operating margin range. We expect our typical quarterly earnings seasonality to be less pronounced in 2021, and we continue to monitor overall market developments including visibility for semiconductor availability. I am proud of how we have continued to successfully deliver to our customers during the global semiconductor shortage.

I want to recognize all the hard work that the Nokia team has put in and thank them for delivering such a strong first quarter.

CWEB Analyst’s have initiated a Buy Rating for (NYSE:NOK)  and potential upside of $10 in 2021. We cannot ignore the double digit growth and expansion in China.