Nokia Corporation posted interim report for first quarter 2016. Non-IFRS net sales in Q1 2016 of EUR 5.6 billion.
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In the year-ago quarter, non-IFRS net sales would have been EUR 6.1 billion on a comparable combined company basis.
Non-IFRS diluted EPS in Q1 2016 of EUR 0.03. Q1 2016 reflected the acquisition of Alcatel-Lucent, which resulted in a higher share count, as well as higher non-IFRS tax expenses due to unfavorable changes in the regional profit mix.
Note that Nokia's Q1 2016 non-IFRS diluted EPS was reported as a combined company, whereas the Q1 2015 non-IFRS diluted EPS of EUR 0.05 was reported on a Nokia stand-alone basis.
In Q1 2016, the net cash and other liquid assets of the combined company increased by EUR 471 million, to EUR 8.2 billion, compared to Nokia on a standalone basis at the end of Q4 2015, primarily due to the acquisition of Alcatel-Lucent, partially offset by cash outflows related to working capital.
Nokia's Networks business highlights
- 8% year-on-year net sales decrease in Q1 2016. Company's performance was primarily due to Ultra Broadband Networks, which declined 12% year-on-year and 27% sequentially, consistent with company's outlook for a greater than normal seasonal decline in the wireless infrastructure market in Q1 2016. IP Networks and Applications grew on a year-on-year basis.
- Strong non-IFRS gross margin of 38.3% in Q1 2016 primarily due to improved product mix in Ultra Broadband Networks (led by Mobile Networks) and IP Networks and Applications (led by IP/Optical Networks), as well as efficiency gains.
- Non-IFRS operating margin of 6.5% in Q1 2016. The year-on-year increase of 2.8 percentage points was primarily due to the higher non-IFRS gross margin, as well as continued focus on execution excellence.
Nokia Technologies highlights
- 27% year-on-year net sales decrease in Q1 2016. Company's performance was affected by the absence of the following three items which benefitted Q1 2015: non-recurring adjustments to accrued net sales from existing agreements, revenue share related to previously divested intellectual property rights (IPR), and IPR divestments.
- Excluding these three items, net sales increased year-on-year by approximately 10% due to higher intellectual property licensing income. ■