HELSINKI: Nokia’s net sales dropped more than expected but operating profits (non-International Financial Reporting Standards) increased in the first quarter of 2016, announced the Finnish telecommunication company in its interim report on Tuesday. Nokia’s net sales stood at 5.6 billion euros (6.37 billion U.S. dollars) in the first quarter this year, which was a decrease of 9 percent compared with the same period in 2015. Its operating profit (non-IFRS) was 345 million euros, rising remarkably by 25 percent.
Nokia said its operating profit increased primarily due to the reduced expenses on research and development. The fall in net sales was attributed mainly to the poor performance of Networks business, the mainstay of the company. Nokia Networks’ Q1 net sales stood at 5.18 billion euros, sliding by 8 percent from 2015. Its operating profit reduced dramatically by 61 percent.
Rajeev Suri, president and CEO of Nokia, speculated that sales and earnings in its mainstay business would continue to decline this year, due to the challenging market environment. In January 2016, Nokia finalized the acquisition of the French-U.S. rival Alcatel-Lucent. In April, the company announced its plan to reduce personnel globally, including 1,300 job cuts in Finland.
