Nokia +11% on licensing boost ahead of 5G rollout

|About: Nokia Corporation (NOK)|By:, SA News Editor

Nokia (NYSE:NOK) is up 10.8% premarket after its Q4 beat along with a forecast for a profit turnaround by 2020.

Operating profit rose 7% to €1B, assisted by a one-time catch-up payment of €210M from Huawei.

"We are coming back very fast," says CEO Rajeev Suri. On the cyclical downturn of 4G: "We see some positive signs coming from our North American customers ... The desire to move fast to 5G is certainly there."

Net sales in the Networks business fell 4% due to large variations in exchange rates; they were up 2% in constant currency, driven by IP Networks and Applications and by Ultra Broadband Networks. But operating profit from the business declined 25%.

Meanwhile new license agreements drove 79% gains in sales and 146% gains in operating profits in Nokia Technologies. Of the €210M catch-up payment, about €80M related to 2017 and the rest to prior years.

Overall, Nokia saw constant-currency growth in three of the five Networks business groups as well as strong growth in Nokia Technologies.

Nokia is targeting adjusted EPS of €0.23-€0.27 for the full year in 2018, and €0.37-€0.42 in 2020. Suri says the Networks market will decline again in 2018, "although at a slightly lower rate than our previous forecast, given early signs of improved conditions in North America." Full-scale 5G rollouts should improve market conditions "markedly" for 2019 and 2020.

Press release

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