Finnish telecom gear maker Nokia said it would not give a financial outlook until April following its acquisition of Alcatel-Lucent and warned that demand for new mobile networks would slow this year in China.
In a market where limited growth and tough competition are pressuring prices, the 15.6 billion euro deal helps Nokia to compete with Sweden's Ericsson and China's Huawei previously the world's top two suppliers of network gear.
While fast growing China will cool down, Nokia expected market growth this year in North America, India, the Middle East and Africa, said the company CEO Rajeev Suri.
"We do expect some market headwinds in 2016 as 4G/LTE rollouts in China and some other markets start to slow," Suri said.
"The first quarter, in particular, looks quite challenging as customers assess their CAPEX (spending) plans in light of increasing macroeconomic uncertainty," he added.
There has been an overall fall of about 30 percent in the prices of the shares of the company since the announcement of Alcatel deal last April.
"They didn't give any financial guidance for this year, and all they said about the outlook was that the (networks) market demand looks rather weak. This is a bit like walking in fog," said Mikael Rautanen, analyst at Inderes Equity Research. Rautanen recommends that investors should reduce their holdings in the stock.
While the newly formed merged company can stake claim to be the world's biggest mobile network supplier given the combined sales of Nokia and Alcatel for 2015, the net revenues could be lower due to cost-cutting and eliminating overlap which is likely to relegate the merged company to second place behind Ericsson.
Clocking fourth-quarter group sales below analysts' average expectation of 3.72 billion euros, Nokia's fourth-quarter group sales fell 3 percent in constant currency terms to 3.61 billion euros ($4.08 billion).
However the group did well in terms of operating profit margin which came in at 14.6 percent and was more than the 14.0 percent the company had clocked a year earlier and 13.8 percent in the poll.
With business performing particularly well in Asia and North America, separately, Alcatel-Lucent reported fourth-quarter sales growth of 13 percent to 4.16 billion euros.
While Nokia pushed forward its 200 million euro financial synergy target to 2016 from previous 2017, analysts are of the view that the company was on track to deliver the proposed 900 million euro cost synergies by end-2018.
"We remain confident in management delivering on synergies and see potential upside to these figures over the course of the next years," Bernstein analysts, with an 'outperform' rating on Nokia, said in a note to investors.
Nokia proposed a special dividend of 0.10 euros per share, compared with analysts' average expectation of 0.19 euros and an annual dividend of 0.16 euros per share.
(Source:www.reuters.com)
In a market where limited growth and tough competition are pressuring prices, the 15.6 billion euro deal helps Nokia to compete with Sweden's Ericsson and China's Huawei previously the world's top two suppliers of network gear.
While fast growing China will cool down, Nokia expected market growth this year in North America, India, the Middle East and Africa, said the company CEO Rajeev Suri.
"We do expect some market headwinds in 2016 as 4G/LTE rollouts in China and some other markets start to slow," Suri said.
"The first quarter, in particular, looks quite challenging as customers assess their CAPEX (spending) plans in light of increasing macroeconomic uncertainty," he added.
There has been an overall fall of about 30 percent in the prices of the shares of the company since the announcement of Alcatel deal last April.
"They didn't give any financial guidance for this year, and all they said about the outlook was that the (networks) market demand looks rather weak. This is a bit like walking in fog," said Mikael Rautanen, analyst at Inderes Equity Research. Rautanen recommends that investors should reduce their holdings in the stock.
While the newly formed merged company can stake claim to be the world's biggest mobile network supplier given the combined sales of Nokia and Alcatel for 2015, the net revenues could be lower due to cost-cutting and eliminating overlap which is likely to relegate the merged company to second place behind Ericsson.
Clocking fourth-quarter group sales below analysts' average expectation of 3.72 billion euros, Nokia's fourth-quarter group sales fell 3 percent in constant currency terms to 3.61 billion euros ($4.08 billion).
However the group did well in terms of operating profit margin which came in at 14.6 percent and was more than the 14.0 percent the company had clocked a year earlier and 13.8 percent in the poll.
With business performing particularly well in Asia and North America, separately, Alcatel-Lucent reported fourth-quarter sales growth of 13 percent to 4.16 billion euros.
While Nokia pushed forward its 200 million euro financial synergy target to 2016 from previous 2017, analysts are of the view that the company was on track to deliver the proposed 900 million euro cost synergies by end-2018.
"We remain confident in management delivering on synergies and see potential upside to these figures over the course of the next years," Bernstein analysts, with an 'outperform' rating on Nokia, said in a note to investors.
Nokia proposed a special dividend of 0.10 euros per share, compared with analysts' average expectation of 0.19 euros and an annual dividend of 0.16 euros per share.
(Source:www.reuters.com)
