EU TECHNOLOGY: Nokia Q125 Results
NOKIA Ba1/BBB-/BBB-
Mixed report; reads more negative that Ericsson’s. Results impacted by a €120mn “contract settlement charge” though the numbers were a miss even adjusting for this with no clarity provided. Tariffs seen contributing a 5-8% impact on Q2 op income (based on consensus). A positive is that Nokia has signed a multi-year 5G deal with TMUS that comes contrary to rumours last year (recent headlines had indicated this was a possibility).
- Q1 revs €4.4bn (-3% org). Reported figure in line but org growth is soft.
- Networks +11% org, Mobile +2%org. Both soft.
- Comparable op margin 3.6% (vs. 13.5% in Q124 vs. 6.9% cons).
- Q1 CFO €890mn vs. €1067mn in Q124 though there was a positive €608mn WC flow.
- Q1 CFO ex WC. €368mn vs. €792mn in Q124.
- Q1 FCF €721mn vs. €955mn in Q124. Net cash €3bn (-€1.9bn QoQ on Infinera flow).
- FY guidance affirmed; tax outflow +€50mn (product mix), CapEx +€100mn (on Infinera).
- “In terms of our outlook for the financial year 2025…achieving the topend of the range will now be more challenging”
- “Regarding the tariff situation, there could be some short-term disruption…we currently expect a EUR 20 to 30 million impact to our comparable operating profit in the second quarter…we have not taken an assumption related to tariffs in the second half.”
- CMD planned for November.
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USD: Finding a broader bid into the European session
- The Dollar is mostly flat against G10 as Europe joins the session.
- The Kiwi is the early worst performer, albeit just down 0.17% and still just short of Yesterday's printed low of 0.5711.
- Initial support in NZDUSD is at 0.5678.
- The Yen has pared some losses, but the overnight printed high in USDJPY, was its highest level since the 3rd March.
- While the cross sits some ~20 pips of 150.94, some early focus will be on the price action going through in the US Tnotes, keeping the US Yield elevated.
EQUITY TECHS: E-MINI S&P: (M5) Trades Through The 20-Day EMA
- RES 4: 5970.87 61.8% retracement of the Feb 19 - Mar 13 bear leg
- RES 3: 5924.59 50-day EMA
- RES 2: 5864.25 Low Jan 13 and a recent breakout level
- RES 1: 5825.50 High Mar 24
- PRICE: 5813.00 @ 07:21 GMT Mar 25
- SUP 1: 5650.75/5559.75 Low Mar 18 / 13 and the bear trigger
- SUP 2: 5483.50 2.00 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
- SUP 3: 5396.00 2.236 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
- SUP 4: 5341.87 2.382 proj of the Dec 6 ‘24 - Jan 13 - Feb 19 swing
The trend condition in S&P E-Minis is bearish and the latest recovery appears corrective. MA studies are unchanged - they remain in a bear-mode set-up, highlighting a dominant downtrend. However, Monday’s gains resulted in a breach of the 20-day EMA, at 5803.08. This signals scope for a continuation higher near-term - towards 5864.25, the Jan 13 low. A reversal lower would refocus attention on 5559.75, the Mar 13 low and bear trigger.
