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Nokia Corp.

Nokia Q3 2024 Results: Net Sales Decline, But Gross Margin and Cost Reduction Efforts Show Positive Trends

Strategic Insights

— 2 min read

Nokia Corporation, a leading technology company, has released its Q3 2024 results, which show a decline in net sales, but an improvement in gross margin and cost reduction efforts. In the third quarter, Nokia's net sales decreased by 7% in constant currency compared to the same period last year, primarily due to a strong year-ago quarter in India. However, the company's comparable gross margin increased by 490 basis points to 45.7%, driven by improved product mix, regional mix, and actions to reduce product cost. Nokia's comparable operating margin also improved by 160 basis points to 10.5%, mainly due to higher gross margin and continued cost control.

Key Takeaways:

  • Nokia's net sales declined by 7% in constant currency in Q3 2024 compared to the same period last year, primarily due to a strong year-ago quarter in India.
  • The company's comparable gross margin increased by 490 basis points to 45.7% in Q3 2024, driven by improved product mix, regional mix, and actions to reduce product cost.
  • Nokia's comparable operating margin improved by 160 basis points to 10.5% in Q3 2024, mainly due to higher gross margin and continued cost control.
  • The company's free cash flow was EUR 0.6 billion in Q3 2024, with a net cash balance of EUR 5.5 billion.
  • Nokia expects to be at the high end of its free cash flow target of 30% to 60% conversion from comparable operating profit.
  • The company's full-year 2024 outlook remains unchanged, with a comparable operating profit of between EUR 2.3 billion and 2.9 billion and a free cash flow conversion target of 30% to 60%.
  • Nokia is making significant progress with its cost savings program, with a EUR 500 million run-rate of gross savings actioned.

Statistics:

  • Net sales in Q3 2024: EUR 4.326 billion, a decline of 8% in constant currency compared to Q3 2023.
  • Gross margin in Q3 2024: 45.7%, an increase of 490 basis points compared to Q3 2023.
  • Operating margin in Q3 2024: 10.5%, an improvement of 160 basis points compared to Q3 2023.
  • Free cash flow in Q3 2024: EUR 0.6 billion.
  • Net cash balance in Q3 2024: EUR 5.5 billion.
  • Full-year 2024 outlook: Comparable operating profit of between EUR 2.3 billion and 2.9 billion, with a free cash flow conversion target of 30% to 60%.

Sources:

  • Nokia Corporation Interim Report for Q3 2024
  • Video interview summarizing the key points of Nokia's Q3 results
  • Complete financial report hosted at www.nokia.com/financials

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