NSN posts rise in profit, drop in sales

Network infrastructure vendor Nokia Solutions and Networks (NSN), recently renamed in the wake of Siemens’ exit from the company, has seen its net sales drop by almost 15 per cent year on year to €2.76bn from €3.23bn in 2Q12 in the second quarter 2013.

Gross margin was up to 38.4 per cent in the period, the vendor said, although this figure did not take into “specific items” such as account restructuring charges, country or contract exit charges, purchase price accounting related charges and other one-time charges. It was an improvement of 12.2 per cent on 2Q12.

The results for 2Q13, announced by NSN, differ from those posted in July by Nokia, as they have been updated to take into account changes in the structure of the business, according to a spokesperson.

“The figures presented in the standalone results look different to those reported earlier by Nokia due to certain accounting presentation differences, arising from NSN’s status as one segment of Nokia, whereas NSN reporting has its own segments: Mobile Broadband and Global Services, and the treatment of Optical Networks as discontinued operations,” the spokesperson said.

“The report also includes  more detailed disclosure of our segments – Mobile Broadband and Global Services) as well as on geographical basis.  The narrative for the results is unchanged.”

Operating expenses before specific items in 2Q13 were €722m, down from €820m in 2Q12. This was primarily due to reduced investments in business activities that are not consistent with the focused strategy and structural cost savings from NSN’s transformation and restructuring program, the firm said. It was partially offset by higher investments in areas that are consistent with its focused strategy, most notably on LTE.

On July 1, 2013, Nokia and Siemens announced that they had entered into a definitive agreement for Nokia to acquire Siemens’ entire 50 per cent stake in NSN.

“Our fourth consecutive quarter of strong profitability is testament to excellent performance in both our mobile broadband and global services segments,” said CEO Rajeev Suri. “As a result of our focused strategy and strong financial position, we believe NSN is very well positioned to build on its leadership position in LTE as our customers build the next generation of mobile broadband networks.”

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