That went well – NOT - Nokia's first post-Alcatel numbers dip
Sales of €5.6bn about €500m shy of last year's effort, so the sackings start
When Nokia Networks and Alcatel-Lucent officially became one company, on January 14th this year, board chair Risto Siilasmaa declared “Our earnings, market cap and growth opportunities have multiplied.”
Today, the combined companies reported results for the first time, with €5.6 billion to show off but the confession that a year ago “net sales would have been €6.1 billion on a comparable combined company basis.”
Nokia's networks kit sales fell eight per cent, broadband dipped 12 per cent and IP networks grew by a solitary point. Little wonder the company has also “announced that it has started actions to reduce company personnel globally as part of its synergy and transformation program.”
Just how many are for the chop wasn't revealed, but jobs will go “between now and the end of 2018” as the company seeks “savings in real estate, services, procurement, supply chain and manufacturing.” 30 offices have already consolidated and 40 supplier relationships re-framed.
To pick up the slack, the company's decided that 5G, the Cloud and the Internet of Things are the markets it wants to enter. It's already off and running in the latter market, thanks to the slurp of Withings.
Nokia president and CEO Rajeev Suri has shrugged off the results.
“While our revenue decline was disappointing, the shortfall was largely driven by Mobile Networks, where the challenging environment is not a surprise,” Suri said. “We noted in our Q4 2015 earnings release that we expected some market headwinds in 2016 in the wireless sector and we continue to hold that view today.”
Suri added that integration between Alcatel-Lucent and Nokia is going so well that “we are now sufficiently confident in our progress that we are targeting synergies that are both more than and faster than our original plan.”
The CEO also points out that the company can report a profit, a good outcome given Q1 is not exactly peak buying season. That profit was notional: once all the writing off and other accounting contortions were performed, some to accomodate the AlcaLu acquisition, the company reported a €613m loss. ®