Finland-based Nokia Corporation’s (NOK – Free Report) fourth-quarter 2016 earnings per share of €0.12 (approximately 13 cents) beat the Zacks Consensus Estimate of 8 cents. In the year-ago period, Nokia had reported earnings of €0.15 (17 cents) per share.

Net sales declined year over year (on a comparable combined company basis) to €6.7 billion (approximately $7.1 billion). Moreover, the top line missed the Zacks Consensus Estimate of $7.38 billion. The disappointing performance by the Nokia Networks division was due to the challenging market conditions. Moreover, weak sales in Mobile Networks, which is part of Ultra Broadband Networks, contributed to the significant decline.

Quarterly adjusted gross margin was 42% in the reported quarter compared with 42.4% a year ago. Operating margin decreased 260 basis points (bps) to 14% on a year-over-year basis. In the fourth quarter, Nokia generated net cash from operating activities of €510 million as against €460 million at the end of 2015.

Nokia is rapidly expanding in the field of technology and wireless infrastructure. The company has entered into collaborations and agreements with leading names globally despite competition from peers like Motorola Solutions Inc. (MSI – Free Report) and Clearfield Inc. (CLFD – Free Report) . In fact, the fourth quarter was a busy one for Nokia, as it sued Apple Inc. (AAPL – Free Report) for patent infringement.

Segmental Revenues

In the Nokia Networks segmenttotal revenue was approximately €6,069 million (around $6,372 million), down 14% year over year (on a comparable combined company basis). The segment includes Ultra Broadband Networks, and IP Networks and Applications. The decline in the Ultra Broadband Networks sub-group by 15% to €4,332 million hurt the segmental sales. The segment’s sales also suffered due to a reduction of 12% to €1,976 million in net sales of the IP Networks and Application segment.

Print Friendly, PDF & Email