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In this Nokia (NYSE: NOK) video we take a look at Nokia's latest earnings report!

Nokia has recently released its Q1 report, and I want to share a few highlights and thoughts with you.

We see a better operating margin, but a significant decrease in sales, which has continued from the second half of last year. Q2 is very likely to come with a decrease as well, by the way. It’s nothing special, just the operations normalizing.

What’s very impressive is that thanks to a catch-up in sales and a significant increase in working capital, the free cash flow was almost 1 billion euros. Based on the outlook, they should end the year with about 1.3-1.4 billion. So, that’s a price to free cash flow ratio of around 13, which is not bad for a pretty bad year.

We can see a significant decrease in the Americas and India following a very good year before. There is also a very nice increase in Europe thanks to the timing of some contract renewals from Nokia Technologies, but without it, Europe is also negative.

Just to point out, they have 17.8 billion in current assets which is very close to covering all the liabilities. For a market cap of roughly 17.5 billion, they are traded below the equity, which is very attractive for a profitable business with so much potential to grow.

They remain confident in the previously announced long-term targets, which for me have always been kind of a medium-term milestone. I think then, Nokia and the industry would get in a more mature state, at least in the US and Europe. This was delayed by higher interest rates, which basically pushed the investments 2-3 years into the future. So, even if Nokia itself won’t benefit too much from a rate cut because they typically don’t have a lot of debt, their clients will. Not to mention that being a dividend stock, the market should give it a bit more attention when treasuries pay you 1-2% again.

About a year ago, they reduced the net cash target to focus on research and development and other growth initiatives. Well, now, they showed some recent deals from Nokia Technologies to show a part of what they are focusing on.

They also highlighted the partnerships with NVidia and Dell, so if anything, maybe the market pays more attention to Nokia this way. Remember what happened to Dell recently when they talked about AI and partnering with NVidia.

Nokia's dividend and buybacks remain the same, so a dividend of about 4% and about 1.7% in buybacks, which, if I remember correctly, is pretty much double what it was a year ago. So, definitely not bad to get while I wait for the market to normalize. If they reach the target in a couple of years, this can be much more attractive.

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On my channel, you will find a wide variety of stock analyses - from gold miners such as Barrick Gold (NYSE: GOLD) and Newmont Mining (NYSE: NEM) to tech stocks like Nokia (NYSE: NOK), Alphabet (NYSE: GOOG/GOOGL), Intel (NYSE: INTC) and even healthcare REITs like Medical Properties Trust (NYSE: MPW) and Omega Healthcare Investors (NYSE: OHI).

Although I mostly focus on value investing, there will also be plenty of high-yield dividend stocks being analysed on the channel, especially if I believe that there is value in there.

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DISCLAIMER: I am not a financial advisor and nothing on this channel should qualify as investing advice. All information is provided for your education or entertainment. It is not intended to be investment advice. This information is general in nature and has not taken into account your personal financial position or objectives. Seek a duly licensed professional for investment advice.

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0:00 Nokia Q1 2024 Earnings & Outlook Analysis

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