Nokia has reported a narrower-than-expected 64.6% year-on-year decline in fourth quarter net profit to $682 million, as the company's efforts to expand its portfolio to compensate for a shrinking mobile equipment market bore fruit.
The company's ebitda declined 27% over the same period to $1.01 billion, but analysts had been projecting a decline to $850 billion.
Net sales fell 14% year-on-year to €6.7 billion ($7.21 billion), in a result Nokia said reflects challenging market conditions during the quarter.
But Nokia CEO Rajeev Suri said the company's diversification strategy helped compensate for these conditions somewhat.
“At the start of the year, Nokia was focused primarily on mobile networks,” he said.
“We ended the year as a company with a complete portfolio spanning mobile, fixed, routing, optical, stand-alone software and more; with solid opportunities to drive higher returns through expansion into new customer segments; with emerging businesses in digital health and digital media; and with greatly expanded patent and brand licensing activities.”
For the full year, net sales fell 10% to $23.94 billion, while operating profit fell 25% to $2.17 billion.
“Our ongoing intense focus on execution, cost management and pricing discipline was critical to offset the impact of challenging market conditions over the course of the year,” Suri said.
“While I remain disappointed with our topline development in 2016, we continue to expect our performance to improve in 2017 and see the potential for margin expansion in 2017 and beyond, as market conditions improve and our sales transformation programs gain further traction.”