Nokia narrows losses for Q1

Nokia has reported a first quarter net loss of €435 million ($472.7 million), an improvement from the €712 million loss recorded in the same quarter a year earlier.

Operating profit actually grew 9% year-on-year during the quarter, but net profit was impacted by higher operating expenses accrued as the company invested in digital health and digital media businesses and faced increasing licensing-related litigation costs.

Revenue declined by a lower than expected 4% to €5.38 billion, with the revenue decline in Nokia’s networks business slowing to 6% from 14% in the previous quarter.

Networks revenue fell to €4.9 billion, with ultra broadband networks accounting for €3.59 billion of this total and IP networks and applications making up most of the remainder.

Nokia Technologies revenue grew 25% year-on-year to €247 million, mostly due to higher patent and brand licensing income and the acquisition of French consumer electronics company Withings in June last year.

“Nokia’s first quarter 2017 results demonstrated our improving business momentum, even if some challenges remain,” Nokia CEO Rajeev Suri said.

“We slowed the rate of topline decline and generated healthy orders in what is typically a seasonally weak quarter for us. We also continued to see expansion of cross-selling across our full portfolio, delivered excellent gross margins and improved group-level profitability.”

Suri said he is cautiously optimistic about Nokia’s performance in the year ahead, and expects to meet its guidance of ahieving a profit for the full year.

But net sales for the year are expected to decline in line with the expected “low single digit percentage” decline in the primary addressable market for the company’s networks business.