Nokia (NYSE:NOK) posted a solid fourth quarter but warned investors that business will slow this year as LTE buildouts near completion in key markets such as the U.S., China and Western Europe.
The telecom gear vendor reported earnings per share during the fourth quarter of 15 cents, up from 9 cents per share during the year-ago period and outpacing analysts' estimates of 12 cents per share, according to Bloomberg. Nokia posted a profit of $2.03 billion thanks largely to the sale of its Here mapping business to a consortium of German auto manufacturers, but also enjoyed an operating profit margin of 14.6 percent in its network gear business, which accounts for more than 90 percent of its stand-alone sales, Fortune reported.
In its North American networks business, Nokia said net sales decreased 6 percent, "driven by the absence of non-recurring IPR net sales which benefitted the year-ago quarter and lower net sales in Global Services, partially offset by growth in Mobile Broadband," the company said.
The company declined to give a financial outlook until April, however, following the close of its acquisition of Alcatel-Lucent. And it said it expects "some market headwinds in 2016," Wells Fargo Securities noted, as carrier demand for LTE slows in some key maturing markets.
"The company expects a flattish capex environment in 2016 for its total addressable market and a decline in the wireless infrastructure market with a greater than seasonal decline in Q1," Wells Fargo analysts said in a research note. "Nokia continues to drive consistent profitability in its Networks segment though operating margins are likely to fluctuate quarter to quarter. Its IP business has potential for growth following its mobile divestitures; however, we believe resolution and visibility will take time."
Nokia shares were up slightly in trading this morning following the release of the company's earnings.
For more:
- see this Nokia earnings press release (PDF)
- read this Bloomberg report
- read this Fortune article
Special Report: Wireless in the fourth quarter of 2015
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