Nokia Siemens falls further behind Huawei with 18% sales drop
Published: 29 January, 2010
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While Nokia was impressing with its fourth quarter results, it was still dragged down by its infrastructure joint venture, Nokia Siemens. NSN's quarterly figures were far less gruesome than its third quarter, when it reported an operating loss of €1.1bn ($1.54bn) but its full year still saw a year-on-year revenue drop of almost 18%. That was twice the fall-off suffered by Ericsson, whose annual drop was 9% (excluding currency factors).
For the full year, NSN reported revenue of €12.57bn ($17.6bn), down 17.9% on the year before. This puts it further behind Huawei than before - the Chinese firm's unaudited results indicate 2009 revenues of $21.5bn, while Ericsson's were $28.6bn.
Pulled down by the awful Q3, NSN reported operating losses for the year of €1.64bn ($2.3bn), though there were signs of the turnaround the venture has promised for 2010 - for the fourth quarter of 2009, it achieved a small operating profit of €17m. Without one-off charges and extraordinary items, that figure would have been €201m.
As at Ericsson, professional services, particularly outsourcing, was the key driver. In Q4, it accounted for 47% of the total revenue figure of €3.625bn.
NSN repeated its forecast that the market for fixed and mobile networks and services would be flat in 2010 compared to 2009, and also reiterated its claim that it would gain market share, and that it would grow its revenues despite the stagnant overall sector. However, it may have to wait a while for that turnaround. Its guidance for the current first quarter of 2010 is for a year-on-year drop in revenue to between €2.6bn and €2.9bn, down from almost $3bn. And its spell in the black won't last long either, with NSN expecting to report an operating loss in the quarter, and to have a razor thin operating margin of between zero and 2%.
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