Nokia Group CEO Stephen Elop has said that Nokia Siemens Networks had a “remarkable” third quarter in 2012. The networks and services business increased net sales quarter on quarter by 5% and year on year by 3%, and moved into a quarterly operating profit of €182 million, compared to a loss of €227 million in the previous quarter, and €114 million in the same quarter in 2011.
The unit’s operating margins were also boosted, moving from slim margins in the last quarter (-0.8%) and Q3 2011 (0.2%) to a positive operating margin for Q3 2012 of 9% (non-IFRS figures). Nokia said it expected NSN’s margins to continue at around 8% (plus or minus 4 percentage points) in the fourth quarter of 2012.
It was in Asia-Pacific where NSN saw its biggest sales increase, with sales in the region jumping 29% year on year and 23% quarter on quarter. China (4%) and MEA (8%) also saw smaller increases.
In Europe, sales were down 15% year on year and 7% sequentially. NSN said that was due to the “weaker operator investment environment” in Western Europe, as well as NSN’s own trimming of its product and service activities. Sales in the Americas were also down.
In addition, the vendor said sales of both services and infrastructure equipment in China also declined primarily due to ongoing technology transitions which have made the timing of operator spending volatile.
At the end of the third quarter 2012, NSN had approximately 60 600 employees, a reduction of approximately 14 300 compared to third quarter 2011, and approximately 2 700 compared to second quarter 2012.
The company has now incurred restructuring charges of €1 billion as it moves to reduce its annualised operating expenses and production overheads by €1 billion by the end of 2013, compared to the end of 2011. It expects to incur another €200,000 in charges before the end of 2012.