Nokia's Q4 financial reports better than expected

Nokia's Q4 financial reports better than expected
Nokia Campus in Espoo, Finland

Telecommunications giant Nokia's financial results for Q4 2017 are out and they are better than the initial predictions. The company reported $1,2 billion operating profit for Q4 - up from the $1,101 billion forecast. 

What made the 9% increase a reality was the multi-year patent license agreement, signed between the Finnish company and another network Goliath - Huawei, which brought in $260,4 million, with more revenue expected during the term of the contract.

Despite the good results, Nokia's network business profit has fallen a staggering 25% year-on-year (from $1,064 billion to $802,28 million). Rajeev Suri, CEO of Nokia, said profit declines are expected to continue during 2018, unless operators in North America decide to spend, which could soften the situation. Also, the decline could be even bigger had Nokia not bought fellow network giant Alcatel-Lucent for $16,6 billion in 2016.

The financial slowdown is caused by the fact the 4G cycle is near its end, while wireless providers have not started spending on 5G equipment yet. Rivals Huawei and Ericsson are feeling the repercussions as well, with the latter one reporting financial deficit for the fifth consecutive quarter.

With all that being said, the future still looks bright for Nokia, as network business sales are predicted to climb up as soon as carriers start spending on 5G equipment. “For 2019 and 2020, we expect market conditions to improve markedly, driven by full-scale rollouts of 5G networks,” Rajeev Suri said in a conference call and also made a forecast for an operating margin of 12% by 2020.

Raise in profit is also expected to come from the licensing deals with Xiaomi and Apple signed in 2017.

Full-year wise, Nokia's reporting operating net profit of only $19,84 million.


source: Nokia

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20 Comments

1. antroid

Posts: 396; Member since: Jan 24, 2018

I wished Nokia stayed with Android from the beginning. Even though it had a rough beginning I'm very optimistic about Nokia's future

2. BlackhawkFlys

Posts: 930; Member since: May 07, 2014

They could have also done better had they not abandoned Meego. Meego was a beautiful OS.

3. Subie

Posts: 2424; Member since: Aug 01, 2015

Being a fan of Meego (or now Sailfish), Symbian or Windows Mobile is great but the end result for Nokia would've been the same IMO. The mainstream has spoken and currently that mean its a two horse race. IOS and Android. There's just too few who'll buy it to make it profitable. And I myself am a Windows Mobile fan, but understand the reality of the business. Would I like to see a third viable OS in the market? Yes. Though at this point most companies seem to know that expecting a good return on investment in an OS choice other then Android makes the venture too risky... Hell, as it is making a profit selling Android handsets is already risky enough.

20. Sleeplessmedal

Posts: 31; Member since: Feb 02, 2018

True, ditching Meego was one of the main reason for nokias downfall. I mean the OS had huge potential. it almost offered the basic things which IOS and android offers now (look at the swipe gestures in iphone X ), It was smooth and easy to use unlike the complicated and laggy android at that time. If nokia balanced meego and wp they still would be able to manage at the top.

4. Djz89

Posts: 447; Member since: Aug 25, 2014

i bought a Nokia 3, the wors phone ever. Nice build, but the os is sluggish and slow, alot of bugs, and it was adds everywhere. I switched to the pretty bad xpera xa instead, now that should say something.

5. Sammy_DEVIL737

Posts: 1529; Member since: Nov 28, 2016

Ads? Did you bought it from Amazon? The one which offers you ads on lockscreen.

6. mootu

Posts: 1539; Member since: Mar 16, 2017

The article is about Nokia not HMD Global.

7. SIGPRO

Posts: 2817; Member since: Oct 03, 2012

Nokia uses stock Android, you should not have ads. But if you bought from a store like Amazon you will have crappy ads.

8. Venom

Posts: 3821; Member since: Dec 14, 2017

It's a midrange phone with modest specs, so it's not going to be a powerhouse.

10. mootu

Posts: 1539; Member since: Mar 16, 2017

It's not even midrange, it's very much a budget phone.

12. Venom

Posts: 3821; Member since: Dec 14, 2017

A budget phone that's apparently disappointing to that guy who is having issues with it.

11. meanestgenius

Posts: 22486; Member since: May 28, 2014

Don’t know why you’re mentioning the Nokia 3 here, as Nokia doesn’t make smartphones anymore. That’s all been licensed out to HMD Global now. Good job on the earnings report, Nokia.

15. Humanoid

Posts: 1226; Member since: Dec 11, 2017

Yes.. Many ppl still dont believe that Nokia just gets paid to have the name used on the phones.

16. meanestgenius

Posts: 22486; Member since: May 28, 2014

Exactly. It’s really not a hard fact to understand. It’s pretty simple, actually. They have nothing to do with handsets beyond getting paid for licensing and ensuring quality. Don’t know why people just can’t understand something so simple.

13. Venom

Posts: 3821; Member since: Dec 14, 2017

I agree with you. Nokia should be more careful with what they slap their name on.

17. rouyal

Posts: 1583; Member since: Jan 05, 2018

You bought a bottom shelf, $100 MediaTek phone... what exactly were you expecting?

18. domfonusr

Posts: 1094; Member since: Jan 17, 2014

Good to see Nokia doing well, though I really want to hear how HMD Global did...

* Some comments have been hidden, because they don't meet the discussions rules.

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