Nokia Corporation posted a 13% increase in net sales of €3.3bn (£2.6bn) for the third quarter of 2014 powered by strong sales in the Nokia Networks mobile infrastructure division.
Non-IFRS operating profit showed 33% growth to €457m (£360m), but actual operating profit showed a loss of €810m (£638m) due to a charge of €1.2bn (£946m) for the impairment of goodwill at Nokia's HERE mapping division. Actual profit was up 451% on a year ago to €760m (£599m).
Nokia Networks achieved 13% year-on-year growth in net sales, from €2.6bn (£2bn) in Q3 2013 to €2.9b (£2.2bn) in Q3 2014. Nokia Networks achieved strong underlying operating profitability with non-IFRS operating profit of €397m (£313m), or 13.5% of net sales, compared with €217m (£171m), or 8.4% of net sales, in Q3 2013.
The strong net sales and profitability improvement of Nokia Networks on a year-on-year basis was primarily due to major new LTE network deployments in North America and Greater China, which benefitted the Mobile Broadband segment where sales were up 33% year-on-year to €1.6bn (£1.2bn). However, net sales in the Global Services segment fell by 5% year-on-year to €1.2bn (£946m).
Commenting on the third quarter results on a year-on-year basis, Rajeev Suri, Nokia president and CEO, (pictured) said: ‘Nokia's third quarter results demonstrate our strong position in a world where technology is undergoing significant change. We saw growth in all three of our businesses; non-IFRS earnings per share was up 50%; and we moved forward with our capital structure optimization program, returning cash to shareholders.’
HERE and Nokia Technologies.
Nokia’s mapping division, HERE also delivered a double digit sales increase in the quarter. Net sales were €236m (£186m), up 12% on 2103, while non-IFRS operating profit was zero. Nokia Technologies saw net sales of €152m (£119m)and a non-IFRS operating profit of €98m (£77m), up 17% on 2013
Suri commented: ‘We are sharpening HERE's strategy in order to better balance growth and profitability while ensuring relentless focus on priority segments such as automotive. I am confident that this strategy, combined with a new focus on efficiency gains, positions HERE well for the future.
‘Nokia Technologies continued to invest in the innovation and business infrastructure necessary to enable future growth and renewal of our strong patent portfolio. This work, as well as our current licensing activities, will take time to come to fruition, but I believe that we are moving rapidly in the right direction.’