Nokia Sales Top Estimates as Network Slump Begins to Ease

Nokia Sales Top Estimates as Network Slump Begins to Ease

Nokia reported first-quarter sales that topped analysts’ estimates as a slump in wireless-network demand began to ease and the company reaped more revenue for its patents, according to Bloomberg.

Revenue fell 4 percent to 5.39 billion euros, the Finnish network-equipment maker said. The revenue decline in the networks unit, by far Nokia’s biggest business, slowed to 6 percent from 14 percent in the previous quarter. That contrasts with a 13 percent network-sales drop reported by Swedish rival Ericsson, signaling Nokia is having better success at winning contracts in a tough market.

“The renewed momentum in mobile networks in the quarter is certainly positive signal,“ CEO Rajeev Suri said on a call with reporters. “Nokia’s strong position in the mobile market can be seen in our great first-quarter conversion rate of pipeline opportunities to deal wins.“

Nokia’s purchase of Alcatel-Lucent for $18 billion last year may be helping the Finnish company cope better with the slump than Ericsson. The acquisition gave Nokia fixed-broadband assets, helping it deliver more complete network systems. That end-to-end portfolio makes Nokia a more strategic partner to carriers, Suri said. Last month, Veon awarded Nokia a network-management deal in central and southern Russia as part of an arrangement that saw the phone carrier terminate its contract with Ericsson early.

While China’s Huawei has become the main rival to Nokia and Ericsson, ZTE was tapped for a $1 billion contract to merge and manage Italian mobile networks operated by CK Hutchison and Veon. The Chinese competitor’s win was a blow to Ericsson, which has business with both carriers.

Nokia said wireless carriers showed interest in its faster systems, designed to help operators cope with the increasing usage of mobile data and video. The company said it ended the quarter with 145 customers for 4.5G networks. First-quarter sales at Nokia’s Technologies unit, in charge of its patents, expanded 25 percent. That division also makes health products such as fitness bands and connected scales after acquiring the Withings consumer-products business last year, and collects licensing revenue from Finnish company HMD, which makes Nokia-branded mobile phones.