Nokia Siemens Networks maintains profit, sales down 5% in Q1

Nokia Siemens Networks reported first-quarter sales of EUR 2.80 billion, down 5 percent from a year earlier after a number of divestments. Excluding the divested activities, the exit of some unprofitable contracts and currency effects, the company said sales were flat, as lower service revenues offset higher sales of equipment, primarily in the LTE market. 

The group remained profitable, with an adjusted operating margin of 7.0 percent, but this was down sharply from the Q4 result of 14.4 percent. The margin is expected to drop further to around 5 percent (plus or minus 4 percent points) in Q2. 

The company had a cash outflow of EUR 130 million for restructuring activities in Q1, as it continues to work on reducing operating costs by EUR 1 billion by year-end. The cash costs are estimated at EUR 200 million in Q2 and EUR 550 million over the full year, and Nokia said it's still considering further restructuring. The estimated total cost of the restructuring programme was increased slightly from the company's last report, to EUR 1.4 billion from EUR 1.3 billion. The group's workforce continued to contract, dropping by another 1,700 from the end of 2012 to a total 56,700.