Nokia’s Earnings Crash On Account Of Industry Weakness
Bogged down by weak carrier spending on mobile networks globally, Nokia’s Q2 earnings fell by 49%, much worse than expected. Immediately after reporting the results, the company uplifted its cost cutting goals, a significant portion of which will come from job cuts. Nokia has now set a target of saving EUR 1.2 billion by 2018, up from its earlier target of EUR 900 million. During the recently concluded quarter, sales for Nokia’s networks division fell across the globe, most notably in big markets of Europe and North America, where revenues were down 12%.
A significant improvement for Nokia’s networks business in the near term is unlikely given that its major source of revenues is a market that is losing its steam. The wireless infrastructure domain is going through a lull with global telecos not spending much on wireless networks. And the market is unlikely to present significant opportunities for the three majors (Nokia, Ericsson and Huawei) until a new cycle of network upgrades begins. While the near term looks grim for Nokia, it is indeed in a much better position than Ericsson, given its merger with Alcatel-Lucent. Nokia posses a strong product portfolio of both fixed and mobile networks, while its rival Ericsson lacks the strength in the fixed domain. The Finnish company’s merger with Alcatel-Lucent offers it a comprehensive product line with advanced research capabilities for the development for future technologies such as SDN and cloud computing.
Here’s a snapshot of Nokia’s results:
Have more questions about Nokia? See the links below:
- What Is Nokia’s Revenue & Net Income Breakdown In Terms of Different Segments?
- How Has Nokia’s Revenue & Cash Profit Composition Changed In The Last Five Years?
- By How Much Have Nokia’s Revenue & EBITDA Changed In The Last Five Years?
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