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 The 15.6 billion euro deal helps Nokia to compete with Sweden's
Ericsson and China's Huawei previously the world's top two suppliers
of network gear, in a market where limited growth and tough
competition are pressuring prices.
Nokia CEO Rajeev Suri said the company expected market growth this
year in North America, India, the Middle East and Africa, while fast
growing China will cool down.
"We do expect some market headwinds in 2016 as 4G/LTE rollouts in
China and some other markets start to slow," Suri said.
"The first quarter, in particular, looks quite challenging as
customers assess their CAPEX (spending) plans in light of increasing
macroeconomic uncertainty."
Nokia shares were down 3.5 percent by 0920 GMT and have fallen about
30 percent since the announcement of Alcatel deal last April.
"They didn't give any financial guidance for this year, and all they
said about the outlook was that the (networks) market demand looks
rather weak. This is a bit like walking in fog," said Mikael
Rautanen, analyst at Inderes Equity Research, who recommends
investors reduce their holdings in the stock.
Nokia and Alcatel's combined sales for 2015 year give the merged
company a claim to be the world's biggest mobile network supplier,
but cost-cutting and eliminating overlap will likely relegate it to
second place behind Ericsson.
Nokia's fourth-quarter group sales fell 3 percent in constant
currency terms to 3.61 billion euros ($4.08 billion), below
analysts' average expectation of 3.72 billion euros.
But operating profit margin in the networks unit came in at 14.6
percent, up from 14.0 percent a year earlier and 13.8 percent in the
poll.
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Separately, Alcatel-Lucent reported fourth-quarter sales growth of
13 percent to 4.16 billion euros, with business performing
particularly well in Asia and North America.
Some analysts noted that Nokia was on track to deliver the proposed
900 million euro cost synergies by end-2018, and that it pushed
forward its 200 million euro financial synergy target to 2016 from
previous 2017.
"We remain confident in management delivering on synergies and see
potential upside to these figures over the course of the next
years," Bernstein analysts, with an 'outperform' rating on Nokia,
said in a note to investors.
Nokia proposed an annual dividend of 0.16 euros per share and a
special dividend of 0.10 euros per share, compared with analysts'
average expectation of 0.19 euros.
(Additional reporting by Mathieu Rosemain in Paris; Editing by Keith
Weir)
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