Nokia net loss widens amid weak networks market

Technology Dow Jones Newswires

(Reuters)

Nokia on Thursday reported a widened third-quarter net loss, missing expectations, as the company warned that the mobile networks market would fall more than previously expected this year. 

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The Finnish telecommunications company said the net loss for the three-month period ended Sept. 30 was 183 million euros ($214.7 million), compared with a loss of EUR125 million a year earlier. Analysts polled by FactSet had expected a net loss of EUR181 million. 

The company's adjusted non-IFRS net profit rose to EUR514 million from EUR258 million, it said. 

Nokia's networks business as a whole saw sales decline 9% on year, as continued weakness in the communication service provider market weighed, with Greater China and North America leading the declines. 

The operating margin in its networks business slipped to 6.9% from 8.2%, it added. 

Another strong quarter at its technologies unit helped offset the decline in networks, though, as sales increased 37% on the back of a favorable arbitration outcome with LG Electronics and increasing recurring licensing revenue. 

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Group sales for the quarter were EUR5.5 billion, compared with EUR5.9 billion a year earlier, missing analysts' expectations of EUR5.61 billion. The adjusted gross margin rose to 42.7% from 40%. 

Chief Executive Rajeev Suri said the performance of its patent-licensing business was the clear highlight of the quarter. However, he warned that ongoing challenges in its mobile networks business mean the primary addressable market will decline more than previously expected in 2018. 

Mr. Suri reiterated the company's commitment to its EUR1.2 billion cost-savings plan for 2018, but said that these savings will come at a slightly higher cost than previously expected. 

Nokia expects to propose a full-year dividend of EUR0.19 for 2017.

 

Write to Dominic Chopping at dominic.chopping@wsj.com; Twitter: @domchopping @WSJNordics