Nokia Corporation (NYSE: NOK) today announced the interim financial report for the Q2 2012
Nokia net sales in Q2 2012 were EUR 7.5 billion, up from EUR 7.4 billion in Q1 2012
- Nokia Devices & Services Q2 net sales decreased 5% quarter-on-quarter.
- Lumia Q2 volumes increased quarter-on-quarter to 4 million units.
- Mobile Phones Q2 volumes increased quarter-on-quarter and year-on-year to 73 million units.
- Nokia non-IFRS EPS in Q2 2012 of EUR -0.08, level with Q1 2012; reported EPS EUR -0.38
- Reported EPS adversely affected by non-cash valuation allowances related to deferred tax assets* of EUR 800 million, inventory-related allowances, and restructuring related charges.
- Devices & Services Q2 non-IFRS operating margin negative 9.1%, adversely affected by EUR 220 million of inventory-related allowances for our Lumia, Symbian and MeeGo devices. Smart Devices Q2 gross margin and contribution adversely affected by the inventory-related allowances. Q3 expected to be a challenging quarter in Smart Devices due to product transitions.
- Nokia Siemens Networks returned to non-IFRS operating profitability in Q2; restructuring progressing well and company seeing continued progress against new strategy that focuses on key markets and product segments.
Both gross and net cash higher year-on-year
- Nokia ended Q2 with gross cash of EUR 9.4 billion and net cash of EUR 4.2 billion.
- Net cash lower quarter-on-quarter, after EUR 742 million annual dividend payment to shareholders.
- Nokia Q2 net cash from operating activities of positive EUR 102 million, including receipt of EUR 400 million pre-payments from existing IPR licenses.
A few things to consider:
- NOK stock is trading below gross cash
- $492 million pre-payments received from Nokia’s existing IPR licenses in Q2
- Nokia’s patent portfolio grew more in the first half of 2012 than any previous six month period since 2007
- First tangible gains in Nokia’s turbulent transition to a Windows-based smartphone business from sales in the U.S. market
Nokia’s Lumia handsets, that should be introduced to the market later this year with the Windows Phone 8 OS, may help Nokia for its turnaround. However, Apple (AAPL) expected to launch a new iPhone later this year. Have to a bottleneck for the Nokia’s Lumia with 8 OS, once again…