What: Shares of Nokia (NYSE:NOK) and Alcatel-Lucent (UNKNOWN:ALU.DL) both dropped today, with both stocks down about 12% as of 12 p.m. ET, after Nokia announced that it received an arbitration decision in a patent dispute with Samsung.
So what: The decision settles a patent dispute and covers part of Nokia's patent portfolio until the end of 2018. While Nokia will be receiving a monetary award as part of the arbitration decision, analysts were expecting Nokia to walk away with more, and the company's guidance was disappointing. Nokia's merger with Alcatel-Lucent is expected to close in early 2016, so the latter is being dragged down as well with the news.
Now what: Including the award, Nokia said net revenue for its Nokia Technologies segment in the fourth quarter should be approximately 400 million euros, and a little over 1 billion euros for the full-year 2015. The annualized run rate for Nokia Technologies should now be approximately 800 million euros. The company also expects to receive 1.3 billion euros in each of the next three years as well. Analysts were expecting the arbitration to deliver a much higher award, potentially yielding a run rate of upwards of 1.2 billion euros.