(Yicai Global) Feb. 2 -- Nokia Oyj has posted a EUR384 million (USD480 million) fourth-quarter loss as a result of the recent tax reform in the US.
The firm’s final-quarter operating revenue was on par with the same period a year earlier at EUR6.6 billion after it sold a multi-year patent license to Chinese smartphone maker Huawei Technologies Co., the Finnish company said in its earnings report yesterday. However, the bottom line slumped from a profit of EUR659 million.
US President Donald Trump signed the Tax Cut and Jobs Act into law on Dec. 22. Many firms are benefiting, but others, including computer maker Lenovo Group Ltd., have been hit with one-off charges. Nokia expects to fork out EUR738 million after reassessing its deferred tax assets, marking a big swing from the EUR439 million tax benefit it had in the fourth quarter of 2016.
Nokia’s biggest earner is Nokia Networks, which oversees broadband infrastructure operations. The unit’s quarterly revenue fell 4.3 percent to EUR5.8 billion, but contributed 88 percent to total income. Revenue at another major division, Nokia Technologies, soared 79 percent to EUR554 million. The deal with Huawei and victory in a contract dispute with Blackberry boosted the firm’s non-recurring income by EUR210 million, but this didn’t even cover the decline at Nokia Networks.
The company attributed the drop in revenue to a downturn in the telecommunications market, saying demand for 4G networks has gone downhill and 5G networks won’t be deployed until at least next year. The business climate will improve significantly once 5G goes mainstream, said Rajeev Suri, chief executive.
Nokia’s full-year income was over EUR23 billion, down 2 percent on the year. It had a net loss of nearly EUR1.5 billion attributable to its parent company, almost doubling last year’s deficit.