NOK Nokia Corp

Nokia Corp. has warned of an impending slowdown in the telecommunications-equipment sector amid growing worries about the health of the global economy, just as the Finnish company's integration of the recently acquired Alcatel-Lucent SA gathers speed.

"The first quarter, in particular, looks quite challenging as customers assess their [capital-expenditure] plans in light of increasing macro-economic uncertainty," said Nokia Chief Executive Rajeev Suri on Thursday.

"We see a flattish capex environment for all addressable markets in 2016," Mr Suri said, underlining less buoyant activity in China now that the rollout of new-generation wireless networks is nearly complete in the country.

The Finnish group's wary outlook echoes recent comments from other technology companies and comes days after management disappointed investors with its forecast for how much revenue it is set to gain from its intellectual-property portfolio after a patent deal with Samsung Electronics Co.

It contrasts with Nokia's robust performance at the end of last year, with the group reporting a steep rise in fourth-quarter profit to €1.79 billion euros, inflated by €1.3 billion in proceeds mostly from the sale of its mapping business last year to a consortium of German auto makers.

Excluding that gain, net profit rose 53% to €498 million in the three months to end-December, ahead of market expectations, and up from €325 million in the same quarter a year ago. Growth at Nokia's patent-licensing business helped offset lower demand for its telecom-network equipment.

Nokia said it is too early to provide an outlook for the new combined company--Nokia in the final stages of completing its $16.6 billion takeover offer for Alcatel-Lucent--but will update investors in around three months time.

But Nokia did say at the start of the month that, including the patent pact with Samsung, it expects to receive at least €1.3 billion in cash between 2016 and 2018 related to settled and continuing arbitration regarding its intellectual property, well below some analysts' expectations.

Alcatel-Lucent is at least finishing its life as an independent company in robust health, surpassing a long-delayed goal of reporting positive free cash flow for an entire year in 2015 and fulfilling its turnaround plan. The Franco-American group reported net profit of €589 million euros, or 18 cents a share, more than double net profit of €271 million, or 8 cents a share, a year earlier.

Nokia repeated a previous assessment that the tie-up would result in merger-related benefits worth around €900 million by 2018.

"We have been operating as a combined company for a month," Nokia's Mr. Suri said.

Nokia said on Wednesday that it controls 91.25% of the share capital of Alcatel-Lucent. Nokia needs to own 95% of the stock to squeeze out the remaining shareholders.

The Finnish company said shareholders will receive an ordinary dividend of at €0.16 a share for 2015 plus a special dividend of €0.10 a share, up from €0.14 a share in 2014

--Sam Schechner contributed to this article.

Write to Christina Zander at christina.zander@wsj.com

(END) Dow Jones Newswires

February 11, 2016 04:15 ET (09:15 GMT)

Nokia (NYSE:NOK)
Historical Stock Chart
From Mar 2024 to Apr 2024

Nokia (NYSE:NOK)
Historical Stock Chart
From Apr 2023 to Apr 2024