Nokia has posted better-than-expected third quarter earnings, especially in its networks unit.
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The company had reported an operating profit of €494 million in the previous quarter and net sales of €3.04 billion compared to €3.09 billion in the same quarter past year.
Nokia’s sales in China rose by 27% on a year-on-year basis, to 489 million ($536 million), in the third quarter.
The company’s turnover for the entire year to date now stands at 8.89 billion euros, a few eight percent higher than last year’s sales of 8.25 billion. “But this could be just due to timing, with Ericsson’s projects with Chinese operators coming to an end while Nokia’s continue”, Rauhala said.
The company announced on October 21 that it had received a gree light from regulatory authorities to proceed with the deal.
Nokia also hiked the profitability target for its biggest business, the networks sector (95% of revenue).
Speaking to analysts after Nokia published third-quarter results earlier today, Suri rebuffed a suggestion that Nokia should have acquired Alcatel-Lucent (NYSE: ALU)’s mobile networks division instead of the whole business, emphasizing the importance of IP and software products to Nokia’s future.
Nokia Networks is the telecommunications equipment subsidiary of former mobile phone giant Nokia Corp, which is listed in Helsinki and New York. It has only had one year of profit since the company was created in 2006.
Revenue in the period was down 2 percent at €3.03 billion ($3.34 billion) from a year earlier while net profit plunged 20 percent to 152 million euros ($168 million).
Nokia is making the acquisition to step up a challenge to Ericsson and Huawei Technologies in a network-equipment market showing little growth.
“The result was clearly above expectations and that was entirely thanks to the network business where the sales were as expected but the margins were clearly higher”, Sarkamies said.
Nokia Oyj raised the profitability target for its main networks business as cost-reduction measures are paying off and announced plans for 4 billion euros ($4.4 billion) in shareholder rewards as the company prepares to complete the purchase of Alcatel-Lucent SA.
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Sarkamies pointed out on a more negative note that Alcatel-Lucent’s quarterly report, which was also published on Thursday, was not very strong. The Stock traded at the volume of 8,806,800 shares.
