Nokia returns to profit after handset sale to Microsoft

http://www.bbc.co.uk/news/business-29738306

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Nokia's fortunes since selling its mobile handset unit appear to be improving with the business returning to profit.

The Finnish firm's third-quarter net profits beat analysts' expectations, rising to 747m euros (£591m), from a loss of 91m euros a year earlier. Sales rose 13%.

Nokia sold its handset division to Microsoft, leaving it with a network equipment and software operation.

Nokia shares rose 5.3% on Thursday.

The company, which has been pushing into the US and China markets, said margins in the core network business during the three months were 13.5%, well ahead of analysts' estimates for abut 9.9%.

Nokia, which ranks third in the global network-equipment market after Ericsson and Huawei, said it now expects the network unit's full-year margin to be slightly above 11%.

Nokia's share price is up 140% since Microsoft announced in September 2013 that it would acquire the Finnish company's once-dominant mobile phone business.

"Nokia's profitability is developing better than those of it's rivals... That is due to the comprehensive savings programme that Rajeev Suri [chief executive] has carried out in the past," said Mikael Rautanen, analyst at Inderes Equity Research.

He added: "But one should still remember that these type of (network) projects come in cycles, so the profitability improvement is not permanent."

Microsoft bought Nokia mobiles operation in April in a deal worth $7.2bn (£4.6bn). This week Microsoft announced it was ditching the Nokia brand name from new devices.