Nokia continues to feel heat after 11% Q2 revenue dip
Nokia CEO Rajeev Suri has cited challenging market conditions and the ongoing Alcatel-Lucent integration as reasons for declining revenues in Q2 2016.
August 4, 2016
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Nokia CEO Rajeev Suri has cited challenging market conditions and the ongoing Alcatel-Lucent integration as reasons for declining revenues in Q2 2016.
The Finnish kit vendor, which acquired Alcatel-Lucent for $15.6 billion last year, posted net sales of €5.7 billion for the last quarter, an 11% decline Year on Year considering historical results of the two companies combined. That percentage decline could be slightly misleading considering Nokia’s recent cost-cutting exercises to remove overlapping products, services and teams from its portfolios; so while the numbers look bad on the face of things the reality is that the combined entity’s numbers would never quite reach the heights each company saw individually prior to the merge.
On the whole, its Networks business also saw an 11% decline which CEO Rajeev Suri puts down to particularly challenging market conditions. Suri gave advanced warning of a challenging 2016 back in quarterly announcements last year, so while the numbers are down Nokia did over deliver on its projected forecasted sales.
“Nokia’s second quarter results were largely as expected and reflect solid execution in the midst of a challenging market and the ongoing integration of Alcatel-Lucent,” said Suri. “When we announced our first quarter results, I said that we did not expect to see typical seasonal patterns in the first half of the year, and that prediction proved to be correct.
“The decline of our topline remains a concern, and reflects challenging market conditions. 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 went on to emphasise how important 5G will be to Nokia, and how the vendor needs to harness the opportunity early on to make sure it keeps itself relevant in the next generation of wireless technology.