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Nokia operating profit down due to lower sales and licensing fees


Nokia’s operating profits increased by 4% year-on-year (YoY) to €475 million in Q3 2015  from €457 million in the same quarter last year. The company had reported an operating profit of €494 million in the previous quarter and net sales of €3.04 billion compared to €3.09 billion in the same quarter last year.

Nokia Networks and Nokia Technologies are two major businesses left with Nokia after the sale of its devices and services business to Microsoft in April last year and the sale of Here to Audi, BMW and Daimler in August this year. Nokia Networks’ operating profit was down 2% YoY to €391 million from €397 million in the same quarter last year. On the other hand, Nokia Technologies posted operating profits of €94 million, down 4% YoY.

Nokia Technologies :

– Nokia Technologies is working on its first digital media product called OZO, a virtual reality camera for professionals. The product will be launched in Q4-FY15.

– Net sales decreased 16% on a QoQ basis while increasing by 7% YoY, primarily due to the absence of non-recurring net sales that benefitted the second quarter 2015, as well as lower licensing income from certain existing licensees that experienced decreases in handset sales.

Nokia networks :

– Unveiled a programmable 5G architecture and announced the 5G-ready massive broadband solution for trials in 2016.

– Nokia Networks launched Nokia OSS Office for Telco Cloud, Nokia Service Chaining and Nokia cloud wise Care Services, as well as the availability of the Nokia AirFrame Data Center Solution, and a software-defined storage (SDS) module to provide data storage pools within data centers.

– Launched an IoT lab in South Korea with Korea Telecom and its IoT connectivity solutions for LTE core and radio networks, to help make existing LTE networks IoT ready.

– Reported 2% YoY net sales decrease, due to a lower net sales in Mobile Broadband, partially offset by growth in Global Services.

– Global Services net sales increased by 3% YoY, primarily due to growth in the systems integration business line.

Other recent developments :
– In August, Nokia sold HERE for €2.8 billion (over $3 billion) to the automotive industry consortium which includes automakers Audi AG, BMW Group and Daimler AG. Nokia states that the consortium compensated for some of HERE’s € 300 million ($329 million) defined liabilities as a part of the transaction. From this, Nokia expected to gain cumulative foreign exchange differences of around € 1 billion (over $1.1 billion). At the time, the company said it would report the HERE business as a ‘discontinued operation’ from the third quarter of 2015.

– Nokia acquired French telecommunications equipment company Alcatel-Lucent for €15.6 billion, in an all share deal, in April this year. The combined company will be called Nokia Corporation, with headquarters in Finland and a strong presence in France. Risto Siilasmaa is planned to serve as Chairman, and Rajeev Suri as Chief Executive Officer.

– The same month, Nokia Technologies confirmed that it has no plans to manufacture and/or sell consumer handsets, as had been reported in the media. However, in late June, Nokia CEO Rajeev Suri said that the company was planning on returning to the mobile phones business in 2016, after its contract clause with Microsoft preventing it from using its brand name on handsets expired.

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