Finland’s Nokia reported falling quarterly sales and profits for its network gear business, but outperformed rival Ericsson in a weak market. The improvement was thanks to cost cuts after its recent acquisition of Alcatel-Lucent.
Nokia said total third-quarter operating profit decreased 18 percent from a year ago to $606 million, but was buoyed by a one-off patent licensing payment.
Group sales dropped seven percent from a year ago to $6.49 billion, including network equipment sales falling 12 percent to $5.8 billion which was pretty much what everyone was expecting.
In the third quarter, the networks unit’s operating margin was 8.1 percent, compared with a market view of 7.6 percent.
Sweden’s Ericsson, which replaced its chief executive this week, spooked investors earlier this month when its quarterly profit plunged more than 90 percent.
“The trend of declining sales is similar for both companies, but Nokia has been better prepared for slowing demand by continuously improving its efficiency,” Rautanen said.
Nokia projected global network equipment demand was set to fall for the rest of 2016, but for declines in sales to taper in 2017.
Chief Executive Rajeev Suri said he expected market conditions to stabilise next year,
Nokia is cutting thousands of jobs worldwide following the merger as it seeks savings targets of $1.3 billion in 2018.
The company also on Thursday said its chief financial officer Timo Ihamuotila, who had helped the company to restructure from a troubled mobile handset maker into a network equipment company, would resign to join Swiss engineering group ABB.