NSN revenues dip 18% in 2013, posts $573 million operating profit

Nokia Solutions and Networks (NSN) revenue in 2013 decreased 18 percent to $15.39 billion (€11.28 billion).

Both mobile broadband and global services pulled down NSN revenue in 2013.

NSN revenue from mobile broadband dipped 12 percent to €5,347 million last year, while global services revenue decreased 17 percent to €5,753 million.

The telecom equipment vendor posted operating profit of $572.84 million (€420 million) last year against operating loss of €795 million in 2012. Operating profit is primarily due to NSN’s cost cutting efforts.

NSN posted 22 percent dip in Q4 2013 revenue to €3,105 million from €3,988 million in the same period previous year.

Mobile broadband sales decreased 12 percent €1,563 million in Q4, while global services revenue dipped 22 percent to €1,979 million.

The operating profit of NSN decreased 4 percent to €243 million against €252 million.

Meanwhile, Nokia said despite NSN’s lower top line, underlying operating profitability improved to €1.1 billion or 9.7 percent of net sales, compared to €0.8 billion or 5.7 percent of net sales in 2012, reflecting strong gross margin and continued progress relative to its strategy.

NSN, which will become the main business for Nokia after the divestment of phone business to Microsoft, achieved its target to reduce non-IFRS annualized operating expenses and production overheads by more than €1.5 billion by the end of 2013, compared to the end of 2011.

NSN reported net profit improved to €15 million, compared to a reported net loss of €1.4 billion in 2012, reflecting lower levels of restructuring charges, strong operational performance in both Global Services and Mobile Broadband, and lower purchase price accounting related expenses.

NSN revenue 2013

At the end of 2013, NSN’s contribution to Nokia Group gross and net cash was €2.8 billion and €1.7 billion, respectively, compared to €2.7 billion and €1.5 billion at the end of Q3 2013.

NSN noted that the year-on-year decrease in mobile broadband was primarily due to lower sales in GSM and core networks, which were partially offset by an increase in LTE sales primarily in Greater China, Europe and Asia-Pacific excluding Japan.

The year-on-year decrease in global services was mainly due to reduction in network deployments, consistent with lower levels of large scale mobile broadband deployments, and the exiting of certain contracts in line with NSN’s strategic focus.

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