Nokia profits rise after sale of handset division

Thursday 24 July 2014 17.50
Nokia reported a net profit for the second quarter of €2.51 billion
Nokia reported a net profit for the second quarter of €2.51 billion

Finnish telecom equipment group Nokia jumped back into profit in the second quarter, it reported, boosted by restructuring after it lost its leading position in handsets and sold its phone division to Microsoft.

The group reported a net profit for the quarter of €2.51 billion, from a loss of €226 million at the same time last year, and surprising the market with an unexpectedly rapid recovery based on network technology.

However, sales fell by nearly 7% to €2.942 billion.

The group is focusing on its information networks expertise and on its data technologies as announced last April, when former Nokia Solutions and Networks head Rajeev Suri was appointed chief executive.

The move coincides with a moment when mobile data traffic is surging as the world's largest operators are investing in high-speed mobile phone equipment.

Mr Suri said in a statement that the technology networks division "has allowed us to deliver strong profitability while improving our topline trend."

"Maintaining this balance will remain a clear priority in the second half of the year when we expect networks to return to year-on-year growth," he added.

Nokia fell rapidly from a leading place in the mobile telephone equipment industry to a straggler after being overtaken by the rise of smartphones.

For Nokia, shifting from mobile phones to networks is just the latest change in the company's 150-year history, which has seen it redefine itself over the years from a small forestry group to a maker of rubber boots, tyres, cables, electronics, TVs and then mobile phones.

Each time, the company has known when to cut loose loss-making entities and find new avenues to develop.

The strong turnaround boosted Nokia shares which were showing a gain of 9% to €6.27 in early trading. The overall Finnish stock market was ahead by 0.89%.

Keywords: nokia, rajeev suri