It said the operating profit margin would be around or slightly below the high end of its long-term target range of 8 to 11%, against less optimistic earlier forecasts, which mooted half of the actual margin level reported. The deal is expected to close in the first quarter of 2016.
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An analyst at Swedbank AB, Mathias Lundberg said the 4 billion euros, which will go back to investors should be more than the expectations-few thought Nokia will hold onto the cash during the Alcatel deal.
Nokia’s third-quarter operating profit at the network unit was 391 million euros, 13.6% of its sales. They were up 9.1 percent at 6.63 euros as of 10:07 a.m.in Helsinki. Previously it had expected the margin to be at the midpoint of its target range. The figure exclude the maps division, the company chose to sell to Daimler AG, BMW AG and Audi AG a couple of months ago.
“These results demonstrate that both companies are in excellent shape ahead of the merger”, research firm Sanford C. Bernstein said.
The acquisition of Alcatel-Lucent, which has secured regulatory approval but still needs approval from Nokia’s shareholders, could lift the merged companies into the same revenue league as market leaders, Ericsson AB of Sweden and Huawei Technologies Co. of China.
Nokia’s net sales and operating profit (non-IFRS) grew strongly in the period from January to September of 2015, and the company’s performance in Chinese market seemed to have a remarkable contribution to the result.
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“When it comes to Europe, we will probably witness a little bit of a market under pressure primarily due to the issues the operators are facing with regard to regulation, but also just not enough position for investments given revenues are under stress”, Suri said.
