Ericsson and Huawei's loss was Nokia's gain in the fourth quarter of 2014, as the Finnish company said strong sales of network infrastructure in North America boosted sales and earnings during the period.
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Nokia president and CEO Rajeev Suri |
While its two main network equipment rivals recently noted North America as a weak spot during the final quarter of 2014, Nokia's Networks business registered a 95 per cent improvement in revenues from the region compared to the same quarter in 2013. Nokia Networks also saw European infrastructure revenues grow 4 per cent year-on-year, with the same level of sales growth recorded in Middle East and Africa, and a marginal 1 per cent rise in Asia revenues.
However, the impact of Nokia's North American surge was limited by declines in sales in greater China and Latin America, resulting in total year on year sales growth at the Networks business of 8 per cent to €3.3 billion ($3.7 billion).
The company noted that mobile broadband infrastructure sales grew 13 per cent year-on-year in Q414, though it added that strong growth in LTE sales was partly offset by declining sales of mature radio technologies.
Nokia Networks' higher sales resulted in a 35 per cent annual rise in non-IFRS operating profit at the division to €470 million.
Nokia's HERE mapping business failed to translate higher sales into increased operating profit. Sales increased 15 per cent year on year, but non-IFRS operating profit fell 20 per cent year on year to €20 million.
The picture was similar at Nokia Technologies, the company's IPR licensing division. While Q414 sales rose 23 per cent year on year, non-IFRS operating profit fell 5 per cent to €77 million.
Nokia president and CEO Rajeev Suri said the fourth quarter figures highlight the "power of the new Nokia" and that 2015 will be a "year of execution" following the reinvention of the company during 2014.
While Nokia's overall operating profit rose 66 per cent year on year to €454 million, investors were unimpressed by the company's prediction of declining sales at its Networks business resulting in a near 6 per cent drop in the company's share price, Bloomberg reported.
Meanwhile, Nokia's proposed limits on its dividend payment sparked speculation that it is preparing for a merger, with Alcatel-Lucent already being linked to the company, Reuters reported.
For more:
- see Nokia's Q414 earnings statement [PDF]
- read this Bloomberg article
- view this Reuters report
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