Sales of LTE equipment to Japanese and South Korean operators powered Nokia Siemens Networks to a record third-quarter profit. The vendor said that underlying operating profit jumped to €323 million from €6 million a year earlier, beating all analysts' expectations, according to Reuters.
"Nokia Siemens Networks had a remarkable quarter in which we achieved record profitability on a non-IFRS basis and the NSN cash balance increased for the fourth quarter in a row," Nokia CEO Stephen Elop told Forbes.
NSN's overall sales climbed slightly to €3.5 billion. Results from Asia-Pacific were behind NSN's biggest sales increase, with sales in the region jumping 29 per cent year-on-year, a 23 per cent quarter-on-quarter improvement. China only managed a 4 per cent increase, while MEA recorded an 8 per cent rise for the quarter, according to a Nokia.
"Nokia Siemens Networks' result was amazing; it seems the cost savings are starting to push through," Mikko Ervasti from Evli Bank told Reuters.
However, European sales fell 15 per cent year-over-year and 7 per cent sequentially, with NSN blaming a weaker operator investment environment in the region as modernisation contracts have wound down and operators delayed further network upgrades.
NSN says it's ahead of schedule in terms of its restructuring programme, which include up to 17,000 job cuts, selling non-core assets, and narrowing its focus to mobile broadband, customer experience management and services. NSN claims these actions will allow it to achieve cost savings of €1 billion by the end of 2013.
NSN saw organic revenue growth of 2.6 per cent year-to-year primarily driven by infrastructure sales in Japan, where NSN has been building LTE networks for Softbank and KDDI, according to Michael Soper, a networking analyst with Technology Business Research. This improvement was also boosted by its services segment, which grew in the low single-digits.
Nokia Siemens also forecast strong profits would continue in the current quarter, while the sale of its high-profile BSS unit has yet to happen. Ericsson and Amdocs are seen as possible buyers for the division.
- see this release
- see this Reuters article
- see this Forbes article
- see this Technology Business Research article
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