Nokia reported earnings topping analysts' estimates as rising network spending by phone carriers in the US and China helped the Finnish equipment maker to its first quarter of sales growth since 2011. The stock jumped.
Third-quarter profit excluding some items rose to 9 cents a share from 6 cents a year earlier, Nokia said yesterday. Analysts had predicted 6 cents, the average of estimates compiled by Bloomberg.
Sales increased 13 per cent to €3.3 billion, beating the €3 billion estimate. Chief executive Rajeev Suri, who took over in May after Nokia sold its mobile-phone business to Microsoft for about $7.5 billion, is boosting profit by focusing on more lucrative contracts.
Nokia, vying with Ericsson and Huawei Technologies to supply base stations, antennas and related services, increased sales in North America 53 per cent as carrier Sprint upgraded to faster networks.
“It’s overall robust, solid across the line,” said Per Lindberg, an analyst at ABG Sundal Collier in Stockholm. “Nokia is now regaining market share at a rapid clip.”
The adjusted operating margin at the network unit, which makes up about 90 per cent of Nokia’s sales, expanded to 13.5 per cent from 8.4 per cent a year earlier. Revenue at the division rose 13 per cent, also bolstered by a 38 per cent rise in China and a 9 per cent gain in Europe.
Nokia raised its profitability forecast for the network division, saying its full-year operating profit will be slightly above 11 per cent.
It previously projected the adjusted margin to be at or slightly above the high end of a target range of 5 per cent to 10 per cent.
The company said this month it signed a $970 million contract with China Mobile to provide fourth-generation equipment, software and services out to 2015. Third-quarter sales in North America benefited from Sprint building out a 4G network. - (Bloomberg)
