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Vendor says it is too soon after the Alcatel-Lucent deal to provide 2016 revenue guidance.
Nokia on Thursday reported solid growth in fourth-quarter revenue and earnings but warned that it expects a slowdown in mobile network spending in 2016.
"While the competitive environment in Networks remained generally stable in the fourth quarter, we do expect some market headwinds in 2016 as 4G/LTE rollouts in China and some other markets start to slow," said Nokia CEO Rajeev Suri, in a statement. "The first quarter, in particular, looks quite challenging as customers assess their capex plans in light of increasing macro-economic uncertainty."
Nokia also declined to offer revenue and operating-margin guidance for 2016, claiming that it is too soon after completing its acquisition of Alcatel-Lucent. It said it will issue 2016 guidance alongside its first-quarter results, which are due to be released on 10 May.
"Our work as a combined company has gotten off to a strong start," Suri said. "We are working closely with our customers to ensure we can make fast and effective decisions about overlapping areas of our portfolio, and we are on target to deliver on our previously announced synergy savings."
Nokia expects the Alcatel-Lucent deal to generate annual savings of €900 million in full-year 2018.
Meanwhile, in the three months to 31 December, the Finnish vendor generated revenue of €3.61 billion, up from €3.51 billion in the same quarter a year ago.
Revenue at the Networks business fell 5% year-on-year to €3.21 billion due to a slowdown in core network equipment sales, and lower resale of third-party kit. Sales declined on a geographic basis in all regions except the Middle East and Africa, where sales grew 2% year-on-year to €356 million, and Greater China, where sales increased to €482 million from €413 million.
Meanwhile, revenue at Nokia Technologies – the company’s patent-licensing division – soared to €403 million from €149 million, thanks largely to €200 million of non-recurring adjustments to an existing licensing deal, and €50 million stemming from higher licensing income from new and existing licensees.
This resulted in operating profit surging to €322 million from €77 million, driving Nokia’s overall fourth-quarter net profit up to €499 million from €325 million in Q4 2014.
"2015 was another year of dramatic transformation for Nokia and I am pleased that in the midst of all this change we were able to close the year with solid performances at both Nokia Networks and Nokia Technologies," Suri said.
Nokia’s recent acquisition, Alcatel-Lucent also published its fourth-quarter financials on Thursday.
Revenue grew 13% on last year to €4.16 billion, while adjusted operating income surged to €560 million from €284 million thanks to lower costs and improved profitability at the core networking division.
That helped to drive net profit to €659 million from €271 million in the same period a year earlier.
"I would like to thank all our employees for such an achievement and our customers for their trust," said Philippe Camus, CEO of Alcatel-Lucent. "Based on this success, the group has now embarked on the next chapter of its story with Nokia and will continue to deliver value as part of a global leader in technology and services for an IP connected world."
