Nokia reported a 3 percent net revenue increase for its fourth quarter, to €3.6 billion (US$4 billion), compared to the same period in 2014. And for the full year 2015, the company reported a 6 percent increase in net revenue of €12.5 billion ($14.2 billion) compared to 2014.
However, Nokia CEO Rajeev Suri said in today’s earnings release, “We do expect some market headwinds in 2016 as 4G/LTE rollouts in China and some other markets start to slow. The first quarter, in particular, looks quite challenging as customers assess their capex plans in light of increasing macroeconomic uncertainty.”
On today’s conference call with analysts, Suri elaborated: “It’s the radio market within wireless that we see will be soft during during 2016.”
He said areas of anticipated growth include IP, transport, backhaul transport, video gateways, and some parts of the applications and analytics business: “Those will offset the decline, if you like, from radio, thereby the market being flattish.”
But the 2016 warning hasn’t hit Nokia’s stock, which itself is kind of flattish, trading up about 0.25 percent this morning.
Nokia reported fourth-quarter 2015 earnings per share of €0.15 (about 17 cents), an increase of 67 percent year-over-year, and full-year 2015 earnings per share of €0.36 (about 41 cents), an increase of 33 percent year-over-year.
The company did not provide any 2016 guidance in its earnings call today, saying, “Due to the very recent acquisition of Alcatel-Lucent, Nokia believes it is not appropriate to provide an annual outlook for the new combined Networks business at the present time, and intends to provide its full-year outlook in conjunction with its Q1 results.”
In January, Nokia finalized its $17 billion purchase of Alcatel-Lucent, and the company says when the dust settles, Nokia will have a total number of about 6 billion shares.
Of Alcatel-Lucent’s acquisition, Nokia is promising about €900 million in savings to be achieved by 2018 derived from cuts in overlapping products and services, particularly within the Mobile Networks business group; cuts in regional and sales organizations; reductions in overhead, particularly within manufacturing, supply-chain, real estate, and information technology; reductions in central function and public company costs; and procurement efficiencies.
In 2016, Nokia will begin separating its financial reporting under two areas: the Networks segment, which comprises the bulk of its business, and Nokia Technologies, a much smaller segment focused on licensing and the incubation of new technologies.