Nokia, the world's third biggest network equipment maker, today reported stronger than expected profits as growth in China offset weaker demand in North America and Europe.
The Finnish company also announced a new plan to return money to shareholders.
Nokia said it was on track to complete its proposed €15.6 billion Alcatel-Lucent takeover in the first quarter of next year after securing regulatory approvals.
It also brought forward its €900m cost-saving target for that deal by a year to 2018.
The tie-up will vault the new company into a stronger position to compete with Sweden's Ericsson and low-cost Chinese player Huawei, in a market for telecom network gear that has little growth and tough competition pressing down prices.
Nokia also said it would return excess capital following its divestments of the once-dominant phone business, as well as maps unit HERE.
It promised to distribute €4 billion to shareholders in coming years through dividends and share buybacks.
Analysts had been wary about Nokia's earnings after Ericsson posted disappointing results, citing slowing demand in China.
But Nokia's third-quarter operating profit at the network unit came in at €391m, or 13.6% of sales, significantly above an average forecast for a profit of €297m and a margin of 10.2%, according to a Reuters poll.
Nokia also lifted its full-year profitability forecast for the networks unit. It said the operating profit margin would be around or slightly below the high end of its long-term target range of 8-11%, against its earlier forecast of a margin around the midpoint of that range.
Alcatel-Lucent showed progress on profitability, helped by cost cuts and sales on track at the networking division, which makes products that help telecom operators carry data traffic.
