Nokia delivered a healthy gross margin and operating margin performance for both Q4 and full year 2020 driven by customer demand in North America.
The company reported 5 percent year-on-year dip in net sales in Q4 to 6.57 billion euros ($7.89 billion), beating a consensus figure of 6.42 billion euros according to Refinitiv Eikon data. Revenue at its main networks business fell 7% to 5.04 billion euros ($6.05 billion).
The drop has been attributed to declines in network deployment and planning services offset by growth in radio access products.
Driven by improved mobile access, gross margin in Q4 2020 was 39.2%, compared to 38.5% in Q4 2019. Non-IFRS gross margin was 41.8%, compared to 40.0% in Q4 2019.
The company aims to continued improvements in mobile access portfolio.
"Completing the turnaround in Mobile Networks remains our top priority for 2021, and these visible signs of progress give me confidence that we are on the right track but there is still work to be done," Chief Executive Pekka Lundmark said.
Non-IFRS operating profit in Q4 benefited by approximately EUR 250 million, impacted by timing of revenue recognition and a net positive fluctuation in Nokia’s venture fund investments.
Q4 2020, net cash increased by approximately EUR 0.6 billion, resulting in an end-of-quarter net cash balance of approximately EUR 2.5 billion
Reported diluted EPS in Q4 2020 was negative EUR 0.46, compared to EUR 0.10 in Q4 2019. The change was primarily driven by a net negative fluctuation in income taxes related to the EUR 2.9 billion derecognition of Finnish deferred tax assets and, to a lesser extent, lower operating profit, partially offset by a net positive fluctuation in financial income and expenses.
Comparable operating margin outlook for 2021 was set at 7-10% and net sales and free cash flow adjusted for currency fluctuations between EUR20.6 billion and EUR21.8 billion.
Board does not propose a dividend or dividend authorization for the financial year 2020
NOKIA FINANCIAL RESULTS