The Finnish telecom-equipment maker said on Thursday that it recorded a net loss of €665 million ($738.2 million) in the three months to end-June compared with net profit of €347 million in the year-earlier period as a stand-alone company.
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Shares in the Finnish telecoms networks provider fell 3.2 percent by 1156 GMT (0756 ET) as investors were also unnerved by a softer-than-expected full-year profitability outlook. Suri said he expects to see a slight sequential improvement in the third quarter, followed by a more pronounced improvement in the fourth. The “successful” integration of Alcatel-Lucent is continuing and supports the target of increased cost savings, he added.
Nokia aims to increase its equity holding in Alcatel-Lucent to 100 percent from 95 percent.
In the wake of the results Nokia has said it will look to cut costs again.
CEO Rajeev Suri said the company is now targeting for cost savings of 1.2 billion euros to be achieved in 2018, an upgrade to the earlier announced estimate of combined Nokia and Alcatel-Lucent synergies of 900 million euros. Geographically speaking, the latest drop is relatively evenly distributed as Nokia networks division’s revenue fell 12% in both of the company’s two traditionally strongest regions, North America and Europe. It did not name the client, which is believed to be Brazilian operator Oi.
Nokia has said the sales of its mobile network products were particularly weak in Q2.
Markets however were disappointed by the results.
Nokia profits dropped by almost half to 332 million euros from a year earlier, and turnover dipped by around 11 percent.
“The main factor behind this is general market weakness, especially in the wireless networks segment”, said analyst Mikael Rautanen of Inderes consultancy.
“It has emerged as a bit of a surprise how hard this market is and therefore the result is clearly below expectations”, Rautanen said in his video comment.
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Once the world’s biggest mobile phone maker, Nokia was caught out by the rise of smartphones and ended up selling the handset business to Microsoft (MSFT.O) in 2014, leaving it with the networks business and a portfolio of technology patents.
