Nokia profits rise after sale of handset division

July 24, 2014 by Jari Tanner

(AP)—Telecommunications and wireless equipment maker Nokia Corp. saw its shares surge on Thursday after it reported higher profits and an improved earnings outlook in the wake of its sale to Microsoft of its troubled handset division.

The Finnish company said its second-quarter profit rose 20 percent to 213 million euros ($285 million) on the back of improved profitability of its key networks unit. Net sales in the April to June period fell to 2.9 billion euros from 3.2 billion euros in the same period last year, mainly due to divestments and currency fluctuations at the networks gear unit.

Nokia's stock jumped over 7 percent to 6.13 euros on the Helsinki Stock Exchange.

Chief Executive Rajeev Suri said the result "shows the strength of the company today" as the Finnish firm has restructured and adopted a new business strategy after completing the sale of its mobile phone unit to Microsoft in April.

Suri gave an upbeat outlook for the core networks unit which now accounts for around 90 percent of Nokia's revenue. He said the unit's full-year 2014 operating margin was expected to be "at or slightly above" the long-term target of 5-10 percent, an update to the previous forecast.

"Our expectations for the full year 2014 have improved," said Suri, who took over as Nokia's CEO on May 1.

Suri, who has worked at Nokia since 1995, has been largely credited with a turnaround of the company as the former head of the Nokia Solutions and Networks unit. He reiterated that the revenue of the Networks unit was expected to grow during the second-half of the year.

Chief Financial Officer Timo Ihamuotila said in an interview with Finnish national broadcaster YLE that the networks unit—a major provider of the next generation 4G wireless networks—has done particularly well in boosting market share in China, Japan, South Korea and the United States.

"Nokia is now a strong and a profitable company," Ihamuotila said, pointing to the company's net cash reserves of 6.5 billion euros, which more than tripled from the end of March, before the closing of the 5.44 billion-euro handset unit deal with Microsoft.

Nokia is determined to grow also in two of its other remaining businesses—software and maps. The company said it was seeing particularly good growth in the automotive business for the HERE location-services and map unit.

Explore further: Nokia finalises Nokia Siemens buy, changes name

Related Stories

Nokia finalises Nokia Siemens buy, changes name

August 7, 2013

Finnish mobile phone maker Nokia said Wednesday it had finalised the purchase of German engineering giant Siemens' 50 percent stake in Nokia Siemens Networks, and changed the company's name.

Nokia in Q3 net loss as sales continue plunge (Update)

October 29, 2013

Nokia reported Tuesday a third-quarter loss as sales at the handsets unit it is selling to Microsoft continued to plunge. But the company gave a positive outlook on continuing operations, including the networks unit, causing ...

Microsoft to take over Nokia HQ in 2014 after deal

November 21, 2013

Nokia says its headquarters near the Finnish capital will be taken over by Microsoft on completion of the sale of its cellphone and services division to the U.S. software company, expected in early 2014.

Nokia, Microsoft complete $7.5B cellphone deal (Update 2)

April 25, 2014

Nokia says it has completed the 5.44 billion-euro ($7.5 billion) sale of its troubled cellphone and services division to Microsoft, ending a chapter in the former world leading cellphone maker's history that began with paper ...

Nokia eyes turnaround with new CEO, dividend (Update 2)

April 29, 2014

Nokia is planning for a turnaround now that it has sold its lossmaking handset business to Microsoft, naming on Tuesday a new CEO, promising to pay dividends again and laying out its vision for its remaining operations.

Recommended for you

On soft ground? Tread lightly to stay fast

October 8, 2015

These findings, reported today, Friday 9th October, in the journal Bioinspiration & Biomechanics, offer a new insight into how animals respond to different terrain, and how robots can learn from them.

University team's robot inspired by jumping spider

October 8, 2015

Special insights and observations about how animals move, handle danger and preserve energy are not only interesting but valuable to scientists in the field of robotics. One such contribution of animal-like robotic movement ...

AI machine achieves IQ test score of young child

October 6, 2015

Some people might find it enough reason to worry; others, enough reason to be upbeat about what we can achieve in computer science; all await the next chapters in artificial intelligence to see what more a machine can do ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

not rated yet Jul 24, 2014
I have one of the Microsoft Nokia phones, its great. Too many are losing out due to the Microsoft haters.

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.