Nokia Q4 boosted by North America, swings back to profit

Nokia Q4 boosted by North America, swings back to profit

29 JAN 2015

Ericsson may be feeling the pinch in North America, but Nokia enjoyed a strong fourth quarter there, nearly doubling network sales – year-on-year – to €514 million. The improved performance in this market helped boost overall sales by 9.2 per cent to €3.8 billion.

More encouragingly, the Finnish company returned to profit, although that’s mainly because it off-loaded its struggling handset business in April 2014, selling it to Microsoft.

Total profit attributable to Nokia equity holders was €594 million in Q4 2014, as opposed to a loss of €221 million in Q4 2013.

Rajeev Suri, Nokia CEO, was not slow to talk up the results. “The power of the new Nokia could be seen in our fourth quarter results,” he said. “All of our businesses delivered strong year-on-year net sales growth. Profitability was excellent in Nokia Networks, and we were particularly pleased with our net sales growth in North America and core networks.”

Turnover at Nokia Networks, which makes up the bulk of Nokia revenue, was up 8 per cent year-on-year during Q4 to €3.4 billion. Sales of mobile broadband equipment was up 13 per cent, to €1.76 billion, over the same period.

Nokia said the mobile broadband increase was down to “strong growth in overall core networking technologies and modest growth in overall radio technologies”.

However, within radio technologies, Nokia added that strong year-on-year growth in LTE “was partially offset by a decline in mature radio technologies”.

Nokia Networks also achieved strong underlying operating profitability, with non-IFRS operating profit of €470 million, or 14 per cent of net sales, compared to €349 million, or 11.2 per cent of net sales, in the prior-year period.

But it wasn’t all good news at the networks unit. Q4 sales fell by 9 per cent in Latin America to €308 million, while revenue dipped 3 per cent in Greater China, to €413 million. Growth was steady in Europe, up 4 per cent, to €865 million.

Global Services, however, which is also part of Nokia Networks, returned to year-on-year growth for the first time since Q4 2012, with net sales up by 3 per cent, to €1.58 billion. Nokia highlighted particularly strong growth in the systems integration business line.

HERE, the company’s navigation unit, posted 15 per cent year-on-year growth in net sales, from €255 million to €292 million in Q4 2014. In Q4 2014, HERE sold map data licences for the embedded navigation systems of 3.9 million new vehicles, compared to 3.2 million vehicles in Q4 2013.

Nokia Technologies notched up 23% year-on-year growth in net sales, from €121 million in to €149 million in Q4 2014. The increase, said Nokia, was primarily due to Microsoft becoming a more significant intellectual property licensee following the sale of substantially all of Nokia’s Devices & Services business to the software giant, and “higher intellectual property licensing income from certain other licensees”.

“Looking ahead, while 2014 was a year of reinvention, we see 2015 as a year of execution,” said a bullish Suri. “We are already moving fast, with HERE sharpening its strategic focus, Nokia Technologies accelerating its licensing and innovation activities, and Nokia Networks increasing its momentum in growth areas including virtualisation and telco cloud.”

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Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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