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Finnish vendor expects no near-term improvement in market conditions.
Nokia on Thursday raised its cost-cutting target as underlying second-quarter revenue fell 11% year-on-year.
The Finnish vendor generated revenue of €5.68 billion in the three months to 30 June, compared to €6.36 billion a year earlier.
The decline was attributed to Nokia’s networks business, which saw revenue fall to €5.23 billion from €5.90 billion a year ago, due to lower spending on mobile infrastructure, partially offset by higher spending on fixed network equipment. It is the second quarter in a row that Nokia has reported a slide in revenue, driven by its networks division.
Underlying operating profit fell to €332 million from €649 million, and the company swung to a reported net loss attributable to shareholders of €665 million from a year earlier profit of €336 million.
"The decline of our topline remains a concern, and reflects challenging market conditions," said Nokia CEO Rajeev Suri, in a statement. "While we do not expect those conditions to improve in the near term, we believe we are well-positioned given the scope of our portfolio, focus on operational discipline, strengthening sales execution, and opportunities in the evolution from 4G towards 5G."
Suri said he expects to see a slight sequential improvement in the third quarter, followed by a more pronounced improvement in the fourth.
Meanwhile, Nokia’s ownership of recent acquisition Alcatel-Lucent crossed the 95% threshold during June, Suri said.
"As our successful integration work continues and as we get increased granular visibility into the business, our confidence in our ability to deliver cost savings also increases," he said. "As a result, we are now targeting €1.2 billion in total cost savings to be achieved in full year 2018."
Nokia previously targeted savings of €900 million by 2018.
