Nokia Tumbled to Third-Quarter Loss
27 Octobre 2016 - 10:30AM
Dow Jones News
Nokia Corp. reported a quarterly net loss for the third time in
a row amid sluggish mobile-network sales and charges related to its
recent acquisition of French rival Alcatel-Lucent SA, but said it
will continue to broaden its product portfolio to offset a decline
in the mobile infrastructure market.
The Finnish telecommunications-equipment maker also said
Thursday its Chief Financial Officer Timo Ihamuotila has resigned
to join technology conglomerate ABB Ltd. in Switzerland. He will be
replaced by Kristian Pullola.
Nokia said net loss for the three-month period ended Sept. 30
totaled €125 million ($136 million), compared with a net profit of
€152 million in the year-earlier period excluding the
Alcatel-Lucent acquisition which it completed earlier this
year.
Revenue was up sharply at €5.89 billion from €3.04 billion
reported in the same period last year, reflecting the
Alcatel-Lucent purchase. Nokia said it had €6.40 billion in
combined revenue with Alcatel-Lucent in the third quarter last
year.
Amid a slowing telecom-equipment market and fierce Asian
competition, Nokia's third-quarter results point to a sector-wide
trend after Swedish rival Ericsson AB last week reported a
quarterly loss of 233 million Swedish kronor ($26.1 million).
In recent months, the industry has been severely hit by slower
demand for network upgrades from telecom carriers, as many of them
last year completed the rollout of latest-generation wireless
networks. Meanwhile, Nokia and Ericsson are facing stiff
competition from Chinese companies Huawei Technologies Co. and ZTE
Corp., who have gained significant market shares by offering
innovative products at competitive prices.
Nokia said its mobile sales were down 15% to €3.32 billion,
adding it foresees the mobile infrastructure market shrinking
further in 2017.
However, analysts say Nokia is relatively well-equipped to face
the market's slowdown in part thanks to the Alcatel-Lucent
acquisition.
"Nokia holds an attractive end-to-end product portfolio, an
[intellectual property rights portfolio] with long-term growth
potential and is headed by an experienced management team,"
Handelbanken wrote in a note to clients last week.
While Nokia said it suffered from costs related to the
Alcatel-Lucent transaction and related integration, the
€15.6-billion deal also led to a diversification of Nokia's product
portfolio to include fixed internet gear such as routers and
switches.
Fixed network sales for the quarter were up 3% to €585 million,
the company said.
Sales of Nokia Technologies, the company's intellectual property
and licensing business, more than doubled to €353 million
year-over-year, primarily due to a patent cross- license agreement
with Samsung Electronics Co.
"The power of our broad portfolio was evident in the quarter,"
said Nokia CEO Rajeev Suri in a statement, adding the company aims
to continue to broaden its customer base by offering end-to-end
network solutions.
Write to Matthias Verbergt at Matthias.Verbergt@wsj.com
(END) Dow Jones Newswires
October 27, 2016 04:15 ET (08:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.