Adjusted operating profit fell 18 percent to EUR 556 million, and the margin of 9.3 percent was down from 10.7 percent a year ago but an improvement from 5.8 percent in Q2. The net result was a loss of EUR 133 million versus a profit of EUR 188 million a year ago, due mainly to charges associated with the acquisition of Alcatel-Lucent.
Nokia said market conditions were "softer than expected, particularly in mobile infrastructure". This is expected to continue in Q4 and next year. The company's addressable market is now forecast to contract this year, rather than flat capital spending by operators, and also show a decline in the low single digits in 2017.
For the fourth quarter, the company expects the Networks business to again show "significant" sequential improvement in sales and operating margin, but sales will be lower on an annual basis, falling at a similar rate to Q3. Over the full year, it targets an operating margin of 7-9 percent for the core division, compared to 8.1 percent in Q3, and said it remains on track for achieving the projected cost savings from the merger.
Nokia also announced that its CFO Timo Ihamuotila is stepping down to become CFO of Swiss company ABB. He will continue in his role at Nokia until year-end, after which Kristian Pullola, currently Senior Vice President, Corporate Controller, will become CFO and a member of the Group Leadership Team.
