HELSINKI, February 2: Nokia Corporation said that the firm recorded a net loss of 766 million euros last year, but still the sales almost doubled to 6.6 billion euros. Notably, Nokia on Thursday said that the net sales for the period were up from 3.6 billion euros a year earlier, but that the 2016 results weren't directly comparable as it acquired Alcatel-Lucent during the year.
Describing 2016 as a time of transition, CEO Rajeev Suri says that he was disappointed with the result but that the year ended "well-positioned for the future" for the Finland-based telecoms networks provider despite the challenging climate in broadband networks. "We remain in a position of financial strength," said the chief executive.
Nokia has been going through a process of radical transformation over the last few years. In 2013, it bought 50 percent of its network activities from Germany's Siemens, and the following year it divested from its previously world-leading mobile phone business. It sold its mapping unit here in 2015 as well as completing the deal late last year to buy Alcatel-Lucent, which had only recorded one year of annual profit since its inception in 2006.
Interestingly, Nokia was the world's top mobile phone maker between 1998 and 2011 but was overtaken by South Korean rival Samsung after failing to respond to the rapid rise of smartphones.
Nokia provided the full details of its performance in last year are as follows:
Non-IFRS net sales in Q4 2016 of EUR 6.7bn (reported: EUR 6.6bn). In the year-ago quarter, non-IFRS net sales would have been EUR 7.7bn on a comparable combined company basis (reported: EUR 3.6bn on a Nokia stand-alone basis).
Non-IFRS diluted EPS in Q4 2016 of EUR 0.12 (reported: EUR 0.11) benefited by approximately EUR 0.02-0.03 due to the Q4 2016 non-IFRS tax rate coming in at 23% compared to our guidance.
Non-IFRS diluted EPS in the full year 2016 of EUR 0.22 (reported: negative EUR 0.13).
Nokia's Board of Directors will propose a dividend of EUR 0.17 per share for 2016 (EUR 0.16 per share for 2015).
Nokia's Networks business
14% year-on-year net sales decrease in Q4 2016, reflecting challenging market conditions in Q4 2016 and the difficult comparison against the strong performance by Alcatel-Lucent in Q4 2015.
Strong Q4 2016 gross margin of 40.6% and operating margin of 14.1%, supported by a continued focus on operational excellence and cost controls.
Operating margin of 8.9% in the full year 2016, at the high end of our guidance range of 7-9%.
25% year-on-year net sales decrease and 49% operating profit decrease in Q4 2016, primarily due to the absence of the Samsung arbitration award, which benefited Q4 2015. The declines were partially offset by the expanded intellectual property rights ("IPR") license agreement with Samsung announced in Q3 2016 and divested IPR. In addition, the acquisition of Withings helped to offset the decline in net sales.
Group Common and Other
34% year-on-year net sales increase in Q4 2016, with particularly strong growth in Alcatel Submarine Networks.