Weeks after Ericsson reported a swing to a second quarter loss, Nokia has turned in results that also reflect the challenges facing the telecoms equipment market.
Nokia reported a net loss for the quarter of €423 million ($494.2 million), but this was a significant improvement on the €726 million loss recorded during the same quarter year earlier.
Net sales grew 1% to €5.62 billion, but sales from Nokia's networks business fell 5% to €4.97 billion, with “ultra-broadband” sales down 8% to €2.16 billion. Global services sales were flat at €1.44 billion, and IP networks sales were down 4% at €1.36 billion.
By contrast, Nokia Technologies sales – which include revenue from handset patent licensing agreements – surged 90% to €369 million due to the patent licensing and collaboration agreement with Apple reached in May.
In a statement, Nokia CEO Rajeev Suri warned that the company expects its “primary addressable market with communication service providers to be slightly more challenging in 2017 than earlier forecast,” projecting a decline in the market of between 3-5%.
“Despite these headwinds, I believe Nokia's disciplined operating model puts us in a strong position to succeed in conditions of all kinds and continue to deliver solid shareholder value. In addition, we are seeing catalysts in the United States, China and Japan that point to an acceleration of 5G and the commencement of meaningful roll-outs in 2019.”
Earlier this month, Ericsson reported a swing to a 1 billion kronor ($120.4 million) loss for the second quarter, with net sales down 8% to 49.9 billion kronor. CEO Börje Ekholm pledged to accelerate the vendor's