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Nokia Raises Merger Savings Target as Sales Trail Estimates

  • Shares fall as second-quarter revenue drops 11 percent
  • CEO Suri promises more cut costs after Alcatel-Lucent deal

Nokia Oyj, mired in a stagnant market for wireless networking equipment, reported second-quarter sales that trailed analysts’ estimates and said it would find more costs to eliminate as the company waits for demand to rebound.

The shares fell the most in one month after Nokia reported an 11 percent revenue drop on a pro forma basis to 5.68 billion euros ($6.33 billion), missing the average analyst estimate of 5.87 billion euros. Adjusted earnings were 3 cents a share, Nokia said Thursday. That matched the average estimate.

Phone carriers in key markets such as the U.S. have largely built so-called fourth-generation networks, and the next generation, dubbed 5G, isn’t ready for wide deployment. With few near-term options to boost growth, Chief Executive Officer Rajeev Suri is focused on cost-cutting. He raised the target for savings from the acquisition of Alcatel-Lucent SA on Thursday by one-third.

“The merger execution is progressing, but the tough market situation is really weighing on earnings,” Mikael Rautanen, an analyst at...