Finland's Nokia reported better-than-expected profits for its mainstay
telecom network equipment business but warned that rollouts for new
mobile networks would start to slow this year in its most vital market
China.
Nokia's network gear business, which accounts for more than 90
percent of its stand-alone sales, reported fourth-quarter operating
profit margin of 14.6 percent, compared with 14.0 percent a year earlier
and 13.8 percent in a Reuters poll of analysts.
Net sales for the Nokia group decreased 3 percent in constant currency terms to EUR 3.609 billion ($4.08 billion), it said.
"They
didn't give any financial guidance for this year, and all they said
about the outlook was that the (networks) market demand looks rather
weak. This is a bit like walking in fog," said Mikael Rautanen, analyst
at Inderes Equity Research.
"But the result was strong, the
networks unit is in a very good shape, and Alcatel also put out some
good quarterly numbers," said the Helsinki-based analyst, who recommends
investors reduce their holdings in the stock.
Nokia last month
started to combine its operations with Alcatel-Lucent, and this week it
said it holds 91 percent of Alcatel shares following a second round of
its EUR 15.6 billion all-stock offer.
Separately, Alcatel-Lucent
said in a statement that its fourth-quarter adjusted operating profit
grew to EUR 560 million from EUR 284 million a year ago, helped by
stronger sales at the end of the year, notably in software.
Revenue over the period rose 13 percent to EUR 4.16 billion.
Catch-up
patent payments from Samsung Electronics helped Nokia's total operating
profit in the quarter grow 46 percent from a year ago to EUR 734
million (roughly Rs. 5,634 crores), roughly in line with market consensus.
Nokia
proposed an annual dividend of EUR 0.16 per share and a special
dividend of EUR 0.10 per share, compared with analysts' average
expectation of EUR 0.19.
Nokia said it would issue its full-year
outlook for the combined networks business in conjunction with its first
quarter results.The acquisition is aimed at helping Nokia compete with
Sweden's Ericsson and China's Huawei in the network gear market where
limited growth and tough competition are pressuring prices.
© Thomson Reuters 2016