Nokia just announced its third-quarter performance for 2020, with the main highlights being solid margins and free cash flow, combined with a decline in net sales primarily due to lower services.
Entitled Report for Q3 and January-September 2020, the report features President and CEO of Nokia Pekka Lundmark highlighting the telecom giant’s fiscal performance over the aforementioned period of time.
To start with, continued improvements in the company’s Mobile Access portfolio have been reported, with Nokia intent on reducing production costs, improving product performance, and investing in R&D to drive product leadership.
Strong year-on-year growth in Nokia Enterprise has been reported, along with continued margin expansion year-on-year. The expansion has been largely driven by Mobile Access and Optical Networks.
Yet another plus for this quarter has been a positive operating profit. Furthermore, the company has reported solid free cash flow in both Q3 and the first nine months of 2020.
Not everything has been rosy for Nokia, however. The company has suffered a 7% year-on-year decline in net sales. This drop has largely been attributed to lower services within Mobile Access, which has been consistent with the company’s expectations for lower network deployment services.
Of course, Nokia also talked about 5G. It concluded the year 2019 with its 4G+5G mobile radio market share standing at ~27% (excluding China, for unique market dynamics reasons). The company’s full year 2020 5G market share target remains ~27%, although it does expect its share to be impacted in 2021 due to not converting its 4G footprint into 5G footprint at a large North American customer. Currently, Nokia has 101 commercial 5G deals and 36 live network deployments.
Other financial highlights include net sales figures of €5.3 billion, gross margin of 37.4%, and net cash and current financial investments totaling €1.9 billion.
“I have no doubt that the potential of Nokia is substantial, even if delivering on that promise will take time. We expect to stabilize our financial performance in 2021 and deliver progressive improvement towards our long-term goals after that,” wrote Pekka Lundmark in the report.