Despite Revenue Dip, Nokia's Q1 Net Profit and Technology Patents Fuel Growth
Portfolio Pulse from Anusuya Lahiri
Nokia Corp (NYSE:NOK) reported a 20% year-on-year decline in Q1 2024 net sales to €4.67 billion, missing consensus estimates. Despite this, net profit increased to €438 million from €289 million a year ago, with EPS of $0.10 beating the consensus of $0.06. The decline in sales was attributed to weak demand in Network Infrastructure and Mobile Networks, partially offset by a significant increase in Nokia Tech sales due to new patent license agreements. Gross and operating margins improved, and the company announced a dividend of €0.04 per share. Nokia reaffirmed its FY24 outlook, expecting growth in Network Infrastructure sales and a comparable operating profit of between €2.3 billion and €2.9 billion. Nokia stock has fallen 29% over the last 12 months but traded higher by 0.90% in premarket trading.
April 18, 2024 | 11:35 am
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POSITIVE IMPACT
Investors can gain exposure to Nokia through the IShares U.S. Digital Infrastructure And Real Estate ETF, which includes Nokia in its holdings.
As IDGT includes Nokia in its holdings, Nokia's positive earnings report and dividend announcement could indirectly benefit IDGT's performance, attracting investors interested in digital infrastructure and real estate sectors with exposure to Nokia.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50
POSITIVE IMPACT
Nokia reported a decline in Q1 2024 sales but saw an increase in net profit and EPS, beating consensus estimates. The company announced a dividend and reaffirmed its FY24 outlook.
The positive earnings report, despite the sales decline, and the announcement of a dividend are likely to instill confidence in investors, potentially leading to a short-term positive impact on Nokia's stock price. The reaffirmation of the FY24 outlook further supports this positive sentiment.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
POSITIVE IMPACT
Defiance Quantum ETF, which includes Nokia among its holdings, may see indirect benefits from Nokia's positive earnings report and dividend announcement.
Given that QTUM holds Nokia in its portfolio, the ETF could experience indirect positive impacts from Nokia's earnings beat and dividend announcement. This could make QTUM an attractive option for investors looking for exposure to technology and innovation sectors, including companies like Nokia.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 50