Nokia Siemens Networks posts 5% year-over-year revenue gain
Nokia Siemens Networks, the struggling network equipment joint venture between Nokia and Siemens, posted €3.99 billion ($5.37 billion) in revenues, a 5 percent year-over-year gain and a 14 percent quarter-over-quarter gain.
The venture contributed €650 million ($874 million) to Nokia's net cash position of €800 million ($1.8 billion) sequentially, Nokia reported. In addition, the joint venture operating margin improved quarter-over-quarter and year-over-year to a 14.4 percent of sales in the fourth quarter, the highest level of underlying operating profitability since its formation in 2007, Nokia related in its release.
In the previous quarter, the venture posted its first quarter sales increase and profit since 2011, spurred by demand for 4G LTE network equipment, according to a report by Bloomberg.
The positive financials are the result of a shift in the company's focus on mobile broadband as well as the disposal of non-core assets such as its business support systems and optical networks business units, as well as the reduction of its staff by more than 15,000 positions.
For the first quarter of 2013, Nokia expects the joint venture operating margins to be a positive 3 percent, depending on a number of factors including competitive industry dynamics, product and regional mix, expected continued improvements under the venture's restructuring program and the macroeconomic environment.
The venture expects to cut its annualized operating expenses and production overheads by more than €1 billion ($1.3 billion) by the end of 2013 compared to the end of 2011.
In addition, NSN is looking to raise up to €700 million ($941 million) on the public markets this spring to pay down debt and fund investment, Reuters reported, citing the Financial Times.
This will be the first time the joint venture has tapped into the public markets. This could be in preparation for the venture going public, according to the report. Analysts cited by the report estimated that the venture could be worth well over €5 billion ($6.7 billion) to public investors and private equity firms.
So things are looking up for the network equipment venture as it posts positive financial numbers and seeks to raise capital on the public market. Management's decision to target the 4G LTE equipment market appears to be paying off.
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