Finnish multinational Nokia in its Q1 FY23 earnings report revealed that its Net Sales increased 327 per cent to EUR 853 million from EUR 200 million in Q1 FY22.
The company said growth in sales was due to the ramp in 5G deployments in the country during the quarter. Nokia also mentioned that the 5G deployments have helped it gain market share as well in Q1.
“In Q1 2023, Mobile Networks net sales grew 13 per cent on a reported and constant currency basis. The quarter was driven by the continued ramp-up in 5G deployments in India which grew substantially and we gained meaningful market share,” the company mentioned.
During the quarter, Net Sales in Europe grew 5 per cent to EUR 1,473 from EUR 1,399 in Q1 FY22. Meanwhile, Net Sales in North America declined to EUR 1,666 from EUR 1,826. Overall, the company’s Net Sales increased 10 per cent in Q1.
“Financially we delivered a solid start to 2023 with Q1 net sales growing 9 per cent in constant currency. Our comparable operating margin was 8.2 per cent, a decline of 270bps year-on-year, which was primarily due to expected greater seasonality in Mobile Networks’ profitability, a lower contribution from Nokia Technologies in the quarter and a negative impact from venture fund investments,” said Pekka Lundmark, President and CEO, on Q1 2023 results.
He also mentioned that the company is seeing signs of economic environment impacting customer spending. “Given the ongoing need to invest in 5G and fiber, we see this primarily as a question of timing; nevertheless we will maintain our cost discipline to ensure we can successfully navigate this uncertainty,” Lundmark said.
Nokia’s reported operating profit in Q1 2023 was EUR 426 million, or 7.3 per cent of net sales, up from 6.6 per cent in the year-ago quarter. Its gross margin decreased 310 basis points to 37.5 per cent in Q1 2023 and comparable gross margin decreased 300 basis points to 37.7 per cent.