Shares of Nokia Corp. (NOK) were up +0.70 or +8.83 percent to $8.63 per share in pre-market trading this morning, after the company released better than expected third quarter earnings early this morning. In addition to earnings, the company gave a bullish full year outlook. Nokia stock closed at $7.93, down -0.24 or -2.94 percent in Wednesday’s regular trading session.
Espoo, Finland based Nokia Corp. is a multinational corporation providing wireless network equipment and Internet services which include applications, games, media, music and messaging services. The company was formally the world’s second largest smartphone maker after Ericsson until the handset division was sold to Microsoft last September for $7.5 billion. The deal was finalized on April 25th.
Nokia reported a net profit of €747 million or $946 million, compared to a loss of -€91 million or -$115 million in the same quarter one year ago. The company’s total operating profit increased to €457 million or $578 million. The analyst consensus was for the company to report a profit of €359 million.
Revenue increased to €3.32 billion ($4.2B)versus expectations of €3.02 ($3.8B) billion with a tax benefit of 2 billion and a charge to its operating profit of 1.2 billion for the impairment of HERE — Nokia’s digital mapping unit — goodwill.
Nokia President and Chief Executive Officer, Rajeev Suri, said in the company’s press release that, “Performance at Nokia Networks was particularly satisfying, with both growth and improved profitability. Progress was widespread, with four of our six regions increasing sales; Mobile Broadband sales and profitability were up sharply; Global Services delivered its sixth consecutive quarter of double digit profitability; and I was pleased to see a rebound in Europe driven by our robust deal momentum.”
CEO Suri took the helm in May following the sale of Nokia’s mobile phone division to Microsoft. The $7.5 billion sale enabled the company to increase its North American sales by +53 percent after Sprint upgraded to a higher speed 4G network.
The company reported it had paid a special dividend of €966 million in the third quarter, as well as an ordinary dividend of €408 million or 0.11 per share. Nokia also began a share repurchase program under its capital structure optimization program, investing €220 million.
In addition to stellar earnings, Nokia increased its forecast for profitability for its network division, with full-year operating profit over +11 percent. Nokia had previously forecast its adjusted margin to come in around the higher end of its target range of +5 to +10 percent.
Along with the earnings release, the company announced it was naming Sean Fernback to head its HERE digital map business. Fernback replaces Michael Halbherr ,who resigned after disagreeing on the division’s strategy under CEO Suri. The HERE unit broke even after sales rose 12 percent in the third quarter.
Nokia stock is picking up steam, with this morning’s action clearly indicating investor optimism. The stock is only 0.10 away from its yearly high. With the company continuing its turnaround after the sale of its mobile unit, Nokia’s share price could increase further.
Other News About Nokia
Nokia appoints Sean Fernback to head HERE and as member of the Nokia Group Leadership Team
Fernback will begin as President on November 1st.
Microsoft looks set to drop Nokia name from smartphones
Microsoft to ditch Nokia name from Lumia smartphones.
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