Nokia (NYSE: NOK) reported Q2 EPS of EUR0.10, EUR0.01 better than the analyst estimate of EUR0.09. Revenue for the quarter came in at EUR5.87 billion versus the consensus estimate of EUR5.86 billion.

• Nokia’s outlook assumptions expect the following size and growth in our estimated total addressable markets (Mobile Networks excluding China and Network Infrastructure excluding Submarine Networks) and assuming year-to-date actual EUR/USD rate and 1.04 for the remainder of the year (updated):

• Nokia’s outlook assumptions for the operating margin of each business group in 2022 are provided below:

• We expect Nokia Technologies to deliver a largely stable operating profit performance in 2022 and over the longer-term;
• We expect the net negative impact of Group Common and Other to be EUR 250 million in 2022 and over the longer-term;
• In full year 2022, Nokia expects the free cash flow performance of Nokia Technologies to be approximately EUR 450 million lower than its operating profit, primarily due to prepayments we received from certain licensees in previous years;
• Comparable financial income and expenses are expected to be an expense of approximately EUR 150-200 million in full year 2022 and EUR 100-150 million over the longer-term (update);
• Comparable income tax expenses are expected to be approximately EUR 450 million in full year 2022 and over the longer-term;
• Cash outflows related to income taxes are expected to be approximately EUR 400 million in full year 2022 and over the longer-term; and
• Capital expenditures are expected to be approximately EUR 650 million in full year 2022 and around EUR 600 million over the longer-term.

Rule of thumb related to currency fluctuations: Assuming our current mix of net sales and total costs (refer to Note 1, Basis of Preparation in the Financial statement information section included in Nokia Corporation Financial Report for Q2 and Half Year 2022 for details), we expect that a 10% strengthening in the USD vs. the EUR would have an impact of approximately positive 5% on net sales, a positive impact on operating profit and a slight positive impact to our operating margin, before hedging. In the current financial year, due to the impact of hedging, we expect an approximately neutral impact on operating profit and a slightly negative impact to operating margin (update).

Nokia’s long-term targets as published with our fourth quarter 2021 results remain unchanged.

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