Siemens CFO Joe Kaeser appeared to indicate that the company plans to exit this year from its 50:50 infrastructure joint venture with Nokia (NYSE:NOK), Nokia Siemens Networks.
Kaeser said at an investor conference Wednesday that the company has no appetite to remain in NSN. "I believe 2013 is the time for Siemens to help NSN to move into a better place," he said, according to Dow Jones Newswires.
Nokia Siemens' shareholder agreement comes up for a vote next month, but Kaeser said that for now nothing will change with regard to the venture, because "it isn't going anywhere." However, his comments will likely intensify speculation about the future of NSN. Citing unnamed sources, Bloomberg reported last month that one plan under discussion is a joint buyout of Siemens' stake by Nokia and a strategic partner.
Earlier this month Nokia Siemens sold around $773 million of bonds to repay its debt. Nokia Siemens has recently improved its financial performance as it continues a major restructuring and cost-cutting program aimed at trimming $1 billion in costs and up to 17,000 jobs in a shift toward mobile broadband.
Nokia Siemens CEO Rajeev Suri said last month that the slowing infrastructure market will soon be able to support only three profitable network vendors, and NSN aims to be one of them. "You're going to see radical change in the infrastructure provider sector with clear winners and losers starting to emerge, and with a fundamental change in how those providers must manage their businesses," Suri said last month.
NSN reported a record operating margin and surging sales and operating profit in the fourth quarter. The company posted an underlying non-IFRS operating profit of around $741 million, up from $227 million in the year-ago period and up from around $416 million in the third quarter of 2012. The vendor's net sales grew 14 percent year-over-year and 5 percent from the third quarter to $5.14 billion. Additionally, NSN posted a non-IFRS operating margin of 14.4 percent, up from 4.2 percent in the year-ago period and breaking the previous record of 9.2 percent in the third quarter of 2012.
The fourth quarter of 2012 marked the fifth straight quarter NSN has generated positive cash flow. According to a recent report by analysts at Wells Fargo, NSN accounts for nearly 83 percent of the market value of Nokia's stock.
- see this Dow Jones Newswires article
- see this Bloomberg article
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