Nokia accelerates cost-cutting after market slowdown 

Nokia reported a 9 percent fall in pro forma first-quarter sales to EUR 5.603 billion, hurt by the slowdown in the mobile networks markets. Its Ultra Broadband Networks division posted sales down 12 percent to EUR 3.729 billion, led by a slowdown in the North American mobile market, while IP networks and applications recorded sales 1 percent higher at EUR 1.452 billion, thanks to growth in optical networks. The Nokia Technologies licensing unit also recorded a 27 percent fall in sales to EUR 198 million.
Operating profit rose to EUR 345 million from EUR 276 million a year ago, on a pro forma basis for the merger with Alcatel-Lucent. Savings from the merger and restructuring as well as improved gross margins gave the company an adjusted operating margin of 6.2 percent, up from 4.5 percent a year ago. The net result was a loss of EUR 613 million versus a profit of EUR 139 million a year earlier, due to merger-related charges.
Nokia confirmed it has started the earlier announced job cuts and is pushing ahead quickly with the realisation of synergies from the Alcatel deal.CEO Rajeev Suri said the company will work towards more and faster savings from the merger,and Nokia now expects to exceed the earlier target of EUR 900 million in operating cost savings for 2018.
The focus on the integration this year as well as a weak market outlook are expected to lead to a decline in adjusted sales and operating margin at the Networks business in 2016. The division should achieve a margin of at least 7 percent, Nokia said.

Source: Telecom Paper