Nokia ups outlook as China boosts Networks numbers
Source: View: 207 Date: 2014-07-25

Nokia on Thursday said it expects its Networks business to perform better than previously forecast this year and as a result raised its guidance.

"Our expectations for the full year 2014 have improved and we now expect full-year underlying profitability for Networks to be at or slightly above our long term target range of 5%-10%," Nokia CEO Rajeev Suri said in a statement accompanying the Finnish vendor’s second quarter results.

Nokia turned in a strong set of financials, its first without the mobile handsets business it sold to Microsoft in April.

The firm posted earnings per share of €0.06 in the three months to the end of June, up €0.05 in the year-ago quarter and ahead of analysts’ expectations.

Revenues came in at €2.94 billion, down 7% on-year but up 10% sequentially.

Nokia Networks contributed €2.57 billion to the topline, down 8% compared with the previous year, while its operating margin slid to 11% 11.8%. The sales decline was partially due to the exiting of certain customer contracts and countries, Nokia said, as well as the divestments of businesses not consistent with its strategic focus. Excluding those two factors, sales fell by 5%.

The networks unit saw revenues slide in most of its operating regions, but China bucked the trend; Networks posted 18% sales growth in the Greater China region, bringing in €306 million. The increase was due to Nokia’s involvement in China’s TD-LTE network rollouts.

Nokia Networks also reported 5% sales growth at its Asia-Pacific division as a result of an increase in business in India and Japan.

Amongst other things, constrained operator spending contributed to declines in Europe and Latin America, while lower activity related to a large network deployment project hit revenues in North America.

"In Nokia Networks, our unique operating model has allowed us to deliver strong profitability while improving our topline trend," Suri said. "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."


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