Nokia is 6.3% lower on the NYSE after posting Q2 profits that fell 42% as margins in its key networking business tumbled.
The first half went "as expected," the company said, but net sales dipped (down 5.5%, and down 1% in constant currency) and the network equipment unit continues to lag ahead of an expected 5G cycle (operating profit margin of just 1.5%).
Gross profit fell 13% to €2.04bn. Gross margin dropped 340 basis points, to 38.3%. Nonetheless, Nokia reiterated its full-year guidance -- expecting improving market conditions in Networks with "particular acceleration" in Q4 in North America, and 6-9% operating margins -- and says it "remains on target to deliver €1.2bn of recurring annual cost savings in full year 2018."
Net sales breakout: Networks, €4.69bn (down 6%); Nokia Technologies, €361M (down 2%); Group common and other, €278M (down 9%).
Operating profit breakout: Networks, €69M (down 83%); Nokia Technologies, €292M (up 27%); Group common and other, -€27M.
