Nokia battens down the hatches – 2017 is going to be rough

Like its Scandinavian counterpart, Nokia is having a challenging time of it at the mo, and it’s all hands on deck for a tough 2017.

It had a pretty stinky first half of the year, then had to go and lay off a bunch of dudes (after kind of fudging the announcement), and now it’s saying 2017 isn’t going to be anything special as well. Gah!

Net sales for the Finnish kit vendor were down pretty much across the board, with Nokia Technologies being the only department of note to recording growth – despite its President clearing off mid-quarter.

Revenue generated by Nokia’s Networks business shrunk 12% year-on-year, down from €6bn to €5.3bn. Meanwhile the Ultra Broadband Networks division also dipped another 13% year-on-year, following on from last quarter’s almost symmetrical dip of 12%. While the IP Networks and Applications division was the only bright light in Q2’s results announcement, growing 1%, it just tanked – down 9% to €1.4bn this quarter.

The saving grace, as earlier mentioned, is the growth in the Nokia Technologies division, which jumped up 109% this quarter on 2015, with revenues leaping from €169m to €353m.

To be fair to Nokia, its revenues are largely up sequentially across the divisions, and it stated in Q2 that it would be targeting slight growth; so CEO Rajeev Suri was suitably chuffed.

“When we announced our second quarter results in August, we said that we expected to see slight sequential improvement in both net sales and operating margin in the third quarter in our Networks business, and we delivered in both of those area,” he said.

“I was particularly pleased with our operating margin performance in the quarter, which reflects the strong, focused execution across the organization. We were able to deliver these solid results despite market conditions that are softer than expected, particularly in mobile infrastructure. As we look forward, we expect those conditions to stabilize somewhat in 2017, with the primary addressable market in which Nokia competes likely to decline in the low single digits for that year.”

So it’s still not going to be turning around anytime soon, in short. Our good friends over at Light Reading did a thorough analysis of the results, so check it out here. In the meantime, looks like things won’t be getting much easier in the near term.