Nokia Corp NOK reported a third-quarter FY23 net sales decline of 20% year-on-year (15% in constant currency) to €4.98 billion ($5.42 billion), missing the consensus of $6.20 billion.
EPS was €0.02, and comparable EPS was €0.05 ($0.05), missing the consensus of $0.09. Reported net profit in Q3 FY23 was €133 million, down from €428 million in Q3 FY22. Comparable net profit in Q3 FY23 was €299 million, down from €551 million in Q3 FY22.
Network Infrastructure sales declined by 14% Y/Y in CC. Cloud and Network Services sales decreased by 2% Y/Y in CC, while Nokia Tech fell by 14% Y/Y.
Mobile Networks sales declined by 19% Y/Y in CC due to some moderation in the pace of 5G deployment in India, which meant the growth there was no longer enough to offset the slowdown in North America.
Margins: Gross margin declined by 140 bps to 38.7%. Comparable gross margin decreased by 120 bps to 39.2% due to regional mix in Mobile Networks.
The operating margin decreased by 350 bps to 4.8%, and the comparable operating margin declined by 200 bps to 8.5%.
Nokia held €4.6 billion in cash and equivalents and used €0.4 billion in free cash flow.
Cost Cut Initiative: Nokia targets €0.8 billion - $1.2 billion gross cost savings by 2026, leading to a total company headcount of 72,000 - 77,000, down from the 86,000 employees Nokia has today.
FY23 Outlook: Nokia reiterated full-year 2023 net sales of €23.2 billion- €24.6 billion vs. consensus $26.19 billion with a comparable operating margin of 11.5%-13.0%.
Price Action: NOK shares traded lower by 5.01% at $3.22 premarket on the last check Thursday.
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