Telecommunications firm Nokia unveiled a new CEO today and also reported a net profit for its network equipment business, beating expectations.
Shares in the group jumped 6 per cent in opening deals in Europe.
Operating profit at its networks business, known as NSN, saw a 10 per cent rise year-on-year in the first quarter. This beat analysts’ expectations in a Reuters poll. Sales in the first quarter for the group as a whole came in at 2.7 billion euros ($3.7 billion), and the group earned 0.04 euros share, against the 0.08 euros seen in the fourth quarter of 2013. Nokia added that it would return an extra 1 billion euros to shareholders from the sale of its phone unit.
Nokia now focus on NSN, which accounts for nearly half of their total revenue. It has been announced that Rajeev Suri will take the helm in what promises to be an interesting development.
“Rajeev is the right person to lead to company forward,” Nokia Chairman Risto Siilasmaa said in a statement. “He has a proven ability to create strategic clarity, drive innovation and growth, ensure disciplined execution and deliver results,” he added.
Suri undertook an aggressive restructuring drive in 2011 that saw around 17,000 Nokia jobs axed at the unit in an attempt to make it more profitable. Largely commended with the resultant turnaround, analysts believed Suri was a natural choice for the company. 2013 saw the networks unit post operating profits of 1.1 billion euros, up an impressive 39 per cent from the year before.
Microsoft completed its acquisition of Nokia’s devices and services last week. The two companies formed a partnership to produce several well-received Smartphones in recent years, but Nokia has struggled with market share over the past few years. But Siilasmaa has stated that Nokia has now begun a “new era”.
“With our strategic direction now set, our highly talented teams can focus fully on realising our vision by building on Nokia’s three strong business Networks, HERE and Technologies. In all three businesses, Nokia has a solid foundation and we continue to see attractive opportunities to invest in growth,” he said.