Nokia Siemens Networks (NSN) continued to benefit from its cost-cutting efforts and refocusing of the business, as it reduced its loss despite a fall in sales.
The company reported a net loss of €136 million for the first quarter of 2013, compared with a €1.28 billion loss for the same period in 2012. The joint venture of Nokia and Siemens reported net sales of €2.72 billion, a year-on-year decline of 5.1 per cent from €2.86 billion.
The company said the drop in net sales was largely due to divestments of businesses that weren’t consistent with its strategy in 2012, and exiting of certain customer contracts.
On an operating level, NSN reported a profit of €10 million, after making a loss of €989 million a year earlier. The company also reported a solid operating margin, before specific items, of 7.4 per cent, which it attributed to “strong execution” of its focused strategy, including lower operating expenses.
Operating expenses before specific items were €717 million compared to €888 million a year earlier, due to the successful execution of the company’s transformation and restructuring programme.
NSN announced a significant restructuring in November 2011 as it looked to cut EUR1 billion in costs by the end of 2013. Steps included cutting 17,000 jobs and selling off various business units as the company moved to specialise in mobile broadband.
Since November 2011, NSN has sold its WiMax unit to NewNet Communication Technologies, its Expedience proprietary fixed wireless broadband business to CN Tetragen, its fixed line broadband access unit to Adtran and microwave transport business to DragonWave. It most recently sold its BSS business to Redknee.
NSN CEO Rajeev Suri said the results demonstrate that the company’s turnaround is “on track” with improved execution capabilities through “centralisation of pricing, shifting to global delivery of services, and strengthening contract management”.
The company said it is continuing to consider options as part of its transformation and restructuring programme which may impact financials for the remainder of the year.
Net sales for the Global Services division of the company fell 7.5 per cent year on year, largely down to lower net sales in Professional Services and Care. This was partially offset by higher net sales in the Mobile Broadband business.
Global Services represented 52 per of net sales, with Mobile Broadband accounting for 46 per cent, up from 43 per cent a year ago.
Suri also noted NSN’s strong position in LTE. The company added a number of new commercial LTE deals during the period, including Movistar Chile, US Cellular and Bharti Airtel. It was also selected to develop LTE-Advanced architecture for Japanese operator NTT Docomo.