Communications technology giant Nokia has reported a surprise $513m loss for its first quarter, which it attributes to slow mobile network sales and the costs of acquiring Alcatel-Lucent.
Nokia’s Q1 loss compares with a €177m profit a year ago.
The company said that profit would have come in at €139m if costs associated with its €15.6bn acquisition of French communications giant Alcatel-Lucent weren’t taken into account.
‘While integrations of the scale of Alcatel-Lucent are complex and take time, we are now sufficiently confident in our progress’
– RAJEEV SURI, NOKIA
For the first quarter, Nokia reported revenues of €5.6bn, up from €3.2bn a year earlier.
Analysts had been expecting a net profit of €237m on revenues of €5.7bn.
Nokia’s more nimble future
Nokia said that it is planning headcount reductions in order to make it more nimble to capture opportunities in areas like 5G, the cloud and the internet of things.
During the quarter, Nokia revealed it plans to acquire Withings, a digital health pioneer, for €170m in order to strengthen its position in the digital health and internet of things world.
“While integrations of the scale of Alcatel-Lucent are complex and take time, we are now sufficiently confident in our progress that we are targeting synergies that are both more than and faster than our original plan,” said Nokia president and CEO Rajeev Suri.
“We already have agreed transition plans that cover the most pressing areas of portfolio overlap with most of our top customers; have begun the process of reducing overlapping personnel, including initial reductions in the US and several other countries; started to consolidate our real estate footprint with several sites already closed and 30 more scheduled for the current quarter; and completed 40 projects with suppliers to drive procurement savings, with 200 more projects currently underway and plans for hundreds of additional projects to be launched largely over the course of Q2 2016,” Suri said.
Cell tower image via Shutterstock
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