Nokia Siemens Networks has the lowest operating margin among the
leading telecom equipment providers.
Nokia Siemens Networks‘
operating margin in Q3 2011 stood at -3.3 percent compared with -9.6 percent in
Q3 2010 and -3 percent in Q2 2011.
The operating margin of Nokia, the handset major and the 50
percent owner of Nokia Siemens Networks, in Q3 2011 was 2.4 percent against
11.3 percent in Q3 2010 and -4.5 percent in Q2 2011.
The operating margin of Nokia Siemens Networks was a drain on the
profitability of Nokia that reports revenues from network business, handset and
NAVTEQ.
The operating margin of Ericsson, the main rival of Nokia Siemens
Networks, stood at a healthy 11.3 percent in Q3 2011 compared with 13 percent
in Q3 2010 and 9.2 percent in Q2 2011. Operating margin of Ericsson’s network
business was 13 percent in Q3 2011 against 17 percent in Q3 2010. (please see
the chart below)
Alcatel-Lucent, which is
going through a bad phase, reports 4.6 percent operating margin in Q3 2011. The
company is aiming for an adjusted operating
margin of around 4 percent of 2011.
According to Nokia guidance for Q4 2011, Nokia and Nokia Siemens
Networks expect the non-IFRS operating margin in Nokia Siemens Networks to be
between 1 percent and 4 percent in the fourth quarter 2011.
According to a press statement from
Nokia Siemens Networks, it aims to reduce its non-IFRS annualized operating
expenses and production overheads by EUR 1 billion by the end of 2013, compared
to the end of 2011.
As
part of its restructuring exercise, Nokia Siemens Networks will reduce its
global workforce by approximately 17,000 by the end of 2013 from the present
74,000.
OPERATING
MARGIN OF MAJOR TELECOM EQUIPMENT VENDORS
Q3 2011 Q3 2010
Nokia
Siemens Networks
-3.3
-9.6
Ericsson
11
13
Ericsson’s
network business 13
17
Alcatel-Lucent
4.6
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By Baburajan K
[email protected]
