Telecom financials round-up: Nokia sees weak quarter, increased competition
Written by: Sam Fenwick | Published:

Nokia has published its interim report for 1Q19, describing it as a weak quarter for the company, but in line with its expectations and it expressed confidence that “those issues that those issues that drove weakness in our results will ease over the remainder of the year.”

It added that: “Due to the evolving readiness of the 5G ecosystem, in Q1 2019, we were unable to recognise approximately EUR 200 million of net sales related to 5G deliveries mainly in North America, which we expect to recognize in full before the end of 2019.” Non-IFRS (International Financial Reporting Standards) net sales rose by 2 per cent in 1Q19 compared to 1Q18 to €5.032 billion, but fell by the same percentage on a constant currency exchange basis.

Rajeev Suri, Nokia’s president and CEO said: “…Competitive intensity has slightly increased in certain accounts as some competitors seek to be more commercially aggressive in the early stages of 5G and as some customers reassess their vendors in light of security concerns, creating near-term pressure but longer-term opportunity.”

Earlier this month, Ericsson reported its 1Q19 results – while revenue rose by 7 per cent from 1Q18, driven by sales growth in North America, sales for 1Q19 were down by 23 per cent compared to 4Q18. However net income was in the black at SEK 2.4 billion (£195 million) up from the SEK 6.5 billion loss reported for 4Q18. Ericsson is expecting to close its acquisition of Kathrein’s antenna and filter assets in 3Q19.

In a statement, Börje Ekholm, the company’s president and CEO said: “As previously communicated, we continue to take strategic contracts and incur costs for 5G field trials and, in addition, by end of 2019 we expect large-scale deployments of 5G to commence in parts of Asia. Combined, this will gradually impact short-term margins but strengthen our position in the long term. The impact of strategic contracts and 5G field trials was limited in Q1. The 5G market is gaining momentum and we are well positioned to capture opportunities. We will continue to make substantial investments in R&D, especially in 5G, automation and AI. This is a key part of our focused strategy to strengthen our long-term business and path to reaching our targets for 2020 and 2022.

Huawei reported that it generated CNY179.7 in revenue in 1Q19, up 39 per cent from 1Q18. It added that its net profit margin for the quarter was about 8 per cent, slightly higher than that seen in 1Q18. The company reported full year revenue and net profit for 2018 of $105.2 billion and $8.66 billion, respectively. Revenue rose by 19.5 per cent YoY, while net profit rose by 25.1 per cent.

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