Nokia publishes Q3 2018 financial report and announces layoffs

Finnish telecommunications giant Nokia posted this morning their Q3 2018 and Q1-Q3 2018 financial reports. In the third quarter of 2018, Nokia’s revenue was 5.458 billion euros (1% down compared to Q3 2017), with a loss of 127 million euros, which is less than the 190 million euro loss this period last year.

The bad thing is that Nokia’s operating profit (non-IFRS) went down from 668 million euros in Q3 last year to 487 million euros in Q3 this year. The revenue and profits of Nokia Technologies also fell on a yearly basis – from €483million in Q3 2017 to €351 million in Q3 2018. The reason is that last year Nokia had a 170 million euro one-time payment for patents during Q3, while there was no such thing this year. The recurring revenue from licensing is up 19% YoY, and that includes patents and brand licensing.

Nokia still retains the same guidelines announced for 2018 and for 2020, and these are 6-9% operating margin for 2018 and 9-12% operating margin for 2020. Nokia’s addressable networks market shrunk 3% in 2018, compared to 2017, but the company expects that the net sales will “Outperform its primary addressable market in 2018 and over the longer-term”.

You can check Nokia’s full Q3 report as PDF here, while the press release can be viewed here.

Parallel with the earnings press release, Nokia also announced “plans to accelerate strategy execution, sharpen customer focus, and maintain long-term cost leadership”, the second morning’s press release states. It’s basically more restrocturing with a cost-saving target of 700 million euros annualy by end of 2020, that will include layoffs. Nokia says the one-time cost of the “net reduction of employees globally” will be around 900 million euros, so if you’re familiar with the packages Nokia gives when laying people off, you can get an approximate number of employees losing jobs.