Nokia Stock Surges 52% Amid Mixed Earnings Report

Nokia stock has seen significant growth, climbing 52% in 2024, despite challenges in revenue. Strong Q4 EPS of €0.18 surpassed estimates, providing some positive sentiment around the stock.

Date: 25-02-2025

AI Rating: 6

Performance Overview: Nokia stock has outperformed the broader S&P 500 with a substantial increase of 52% since the beginning of 2024, compared to the S&P's 28% gain. This performance is notable against the backdrop of a mixed earnings report.

Earnings Per Share (EPS): Nokia reported a Q4 EPS of €0.18, surpassing analyst forecasts of €0.14 and marking a significant increase from €0.10 per share in the same period last year. This positive beat on EPS is likely to influence investor sentiment favorably.

Revenue Growth: While Nokia’s Q4 revenue growth was up 10% year-over-year, the reported revenue of €5.98 billion slightly fell short of expectations of €6.00 billion. Additionally, full-year revenues saw a decline of 9% year-over-year. These mixed results could create cautious optimism, as the growth in Q4 juxtaposes the annual decline.

Profit Margins: Despite revenue challenges, Nokia's full-year profitability saw a 40% increase, indicative of effective cost management and improved gross margins. This enhancement in profitability may help mitigate negative investor reactions to declining revenues.

Free Cash Flow (FCF): Nokia projected that free cash flow for FY 2025 would represent between 50% to 80% of operating profit, which is an encouraging outlook. Such a strong FCF performance might attract investors looking for financial stability in uncertain times.

Conclusion: In summary, while Nokia faces challenges related to revenue decline, the coming together of various positive factors—such as a strong EPS beat and increasing profitability—may provide enough momentum for investors to maintain interest. However, the decline in revenues and the need for cautious growth could temper overall optimism.

Stocks: NOK ERIC