Cost savings helped limit the drop in adjusted operating profit to 1 percent to EUR 341 million, and the margin improved to 6.3 percent from 6.1 percent a year ago. Lower taxes led to a 29 percent increase in adjusted net profit to EUR 196 million, while the reported net result was still a loss of EUR 473 million, smaller than the loss of EUR 623 million a year ago.
Nokia said the quarter showed improved business momentum, with healthy orders and good cross-selling across its portfolio, helping lift profitability. CEO Rajeev Suri said mobile networks was the highlight of the period, as robust interest in its advanced LTE products helped stabilise sales and improve margins. Fixed networks suffered more from seasonality and a number of large projects coming to an end, and IP/optical was hurt by the weak spending by many traditional operators and is adjusting its costs accordingly.
The group remains focused on cost savings to offset the weaker market conditions and targets a reduction of EUR 1.2 billion by 2018. For 2017, Nokia maintained its forecast for a low single-digit decline in its main networks market, while the networks margin should continue to reach around 8-10 percent. Its new organisational structure, announced last month, will take effect from the reporting of Q2 results.
