The following is a summary of the Nokia Oyj (NOK) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Nokia reported a 19% decline in net sales in Q1 2024 due to a weak spending environment, impacting profitability across all networks businesses.

• Strong free cash flow generation was reported for the quarter, amounting to nearly €1 billion, resulting in a net cash balance of €5.1 billion.

• Savings from ongoing cost reduction initiatives were noted, targeting between €800 million and €1.2 billion by 2026.

• Uncertainty around future financial performance due to unresolved contractual negotiations with AT&T.

• Guidance for mobile networks revenue growth is between -10% to -15% for the year, with efforts underway to improve working capital.

Business Progress:

• Improvement in order intake trends was reported, with a stronger second-half performance expected from their Network Infrastructure business.

• Three smartphone licensing deals have been signed in Nokia Technologies, contributing to an annual net sales run rate of approximately €1.3 billion.

• Key partnerships were announced with Dell for cloud infrastructure and Nvidia to accelerate Cloud RAN deployments and 6G research.

• Commercial developments in O-RAN solutions have reinforced a strong focus on improving R&D productivity and competitiveness.

• Programs involving relations with web-scale customers and market expansion in the United States, particularly among tier 2 and tier 3 operators, private wireless businesses, and the defense industry, are in progress.

• Through cost-saving initiatives and reduction in workforce, Nokia aims to achieve a break-even point at around €8 billion by 2026 and double-digit operating margin at €10 billion.

More details: Nokia Oyj IR

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