While sales of Nokia Technologies experienced a year-on-year growth of 37% in the last quarter, those of the network business fell by 9%.
Nokia is one of the companies that has announced financial results in recent days. And, in your case, there is a bit of everything.
During the third quarter of 2017 , Nokia saw its net sales fall but its profits increased. Thus, non-IFRS net sales have remained at 5,500 million euros compared to 6,000 million in the same quarter of 2016, which implies a contraction of 7% year-on-year. Meanwhile, diluted earnings per share, not IFRS, went from 0.04 to 0.09 euros .
It should be noted that the network business has registered a 9% drop in net sales . In this would have to do, according to its responsible, the part of Ultra Broadband Networks. And the challenges experienced with certain projects in places like North America and Greater China.
When talking about “the problems we face in Mobile Networks,” Nokia CEO Rajeev Suri saysthat “the R & D team in this business group has faced an extraordinarily high workload. Given this situation, we have seen some problems with the time needed to converge some products that, unfortunately, have impacted a small number of customers. ” Suri says that the “team is totally committed to putting these things back on track.”
Where it has seen growth in net sales, with a year-on-year increase of 37% , is Nokia Technology . Here, in addition, operating profits improved 73%. The reason lies in arbitration issues.
“The performance of our patent licensing business was the clear highlight of the quarter,” says Rajeev Suri. “We arrived at a result of favorable arbitration with LG and since then we have established a license agreement with them for a longer period than that established in the arbitration.” In addition, “we have doubled about our recurring license revenue from 578 million euros in 2014” .
“I am also particularly pleased that in 2017 the growth in patent licenses has helped offset the decline in sales on the network side,” adds the manager, who sees “a considerable opportunity to further develop the business in 2018 and beyond”. In the opinion of Nokia’s CEO, “as the market moves to 5G”, there will be “even more evident” benefits.