Nokia posted a second straight quarterly loss due to decreased carrier network investments worldwide as well as expenses related to its acquisition of Alcatel-Lucent.
The Finnish telecom gear vendor saw a net loss of $738.2 million in the second quarter, down dramatically from the $386 million net profit it recorded during the same period in 2015. Earnings before interest and taxes came in at $370 million, well shy of the $445 million predicted in a Reuters poll of analysts.
In North America specifically, Nokia’s networks division saw a 12 percent decline in revenue.
Shares of Nokia were down 19 cents, or more than 3 percent, following the release of the company's earnings report.
Like its rival Ericsson, Nokia is struggling as carriers in mature mobile markets have largely completed their LTE buildouts and are preparing to invest in 5G over the next several years. Meanwhile, mobile network operators in some emerging markets have throttled their network spending due to macroeconomic difficulties. And Chinese vendors Huawei and ZTE Corp. have aggressively moved into the infrastructure space, increasing competition.
Nokia said it plans to regain its financial footing by cutting even more costs. The company said it aims to slash its budget by $1.34 billion by 2018, up from the $1 billion it had previously targeted.
Nokia announced in April that it planned to cut thousands of jobs worldwide, including a reported 1,300 positions in its homeland of Finland.
“The decline of our topline remains a concern, and reflects challenging market conditions. While we do not expect those conditions to improve in the near term, we believe we are well-positioned given the scope of our portfolio, focus on operational discipline, strengthening sales execution, and opportunities in the evolution from 4G towards 5G,” CEO Rajeev Suri said in a prepared statement. “As our successful integration work continues and as we get increased granular visibility into the business, our confidence in our ability to deliver cost savings also increases.”
Nokia recently announced its support for an Obama administration initiative that will spend $400 million over the next seven years to research and develop next-generation wireless technologies. And the company plans to re-enter the mobile phone market it once dominated following Microsoft’s sale of its feature-phone business to a subsidiary of Foxconn for $350 million.
For more:
- see this Fortune article
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