Nokia gave an upbeat forecast for its telecom equipment unit Nokia Solutions and Networks (NSN), giving hope for a pickup in what will be the Finnish company’s main business after the sale of its phones division to Microsoft.<\/p>\n
Shares in Nokia rose 6 percent after the company forecast NSN’s profit margin would improve in the fourth quarter to around 12 percent, plus or minus 4 percentage points, from 8.4 percent in the third quarter.<\/p>\n
NSN’s third-quarter core operating profit fell 33 percent from a year earlier to 218 million euros ($300.5 million) against an average analyst forecast of 228 million in a Reuters poll, as the impact of earlier cost cuts waned and major network upgrades in Japan came to an end.<\/p>\n
The company, however, said NSN’s sales would likely grow in the fourth quarter.<\/p>\n
“When we look at the NSN outlook, we can see that there’s a really strong final quarter coming,” said Inderes analyst Mikael Rautanen. “This is absolutely a very positive thing and certainly explains the positive reaction that’s visible in the stock now.”<\/p>\n
In a positive sign for Microsoft, which is due to take over the handset business some time in the first quarter of next year, sales of Lumia smartphones jumped 19 percent quarter-on-quarter to 8.8 million units, thanks to the launch of new models, while sales of basic phones rose 4 percent from the previous quarter to 55.8 million units. ($1 = 0.7254 euros)<\/p>\n
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