ESPOO (dpa-AFX) - Nokia Corp. (NOK), which sold its flagship mobile phone business to Microsoft Corp. (MSFT), Thursday reported a profit for the third quarter, compared to a loss last year.
The company noted that performance at Nokia Networks was particularly satisfying, with both growth and improved profitability, and raised the division's non-IFRS operating margin outlook for the year.
Profit attributable to equityholders of the parent was 747 million euros ($944.1 million), compared to a loss of 91 million euros last year.
During the quarter, the company recorded a charge to operating profit of 1.2 billion euros for the impairment of HERE goodwill.
Owing to improved operating performance, Nokia also recognized 2.1 billion euros of deferred tax assets related to Finland and Germany, of which 2.0 billion euros was recorded as a non-cash tax benefit in the latest results.
On a non-IFRS basis, profit surged to 353 million euros from 23 million euros in the prior year.
Net sales improved to 3.324 billion euros from 2.938 billion euros in the prior year.
Nokia Networks achieved 13 percent growth in net sales to 2.94 billion euros. Within the business, Mobile Broadband net sales climbed 33 percent while Global Services net sales slipped 5 percent.
The business reported non-IFRS operating profit of 13.5 percent, compared to 8.4 percent last year.
Nokia attributed the growth in net sales and profitability for the business to major new LTE network deployments in North America and Greater China, which benefited Mobile Broadband.
As for HERE, net sales climbed 12 percent to 236 million euros, primarily due to higher sales to vehicle customers and Microsoft becoming a more significant licensee of HERE's services.
During the quarter, HERE sold map data licenses for embedded navigation systems of 3.2 million new vehicles globally, up from 2.6 million vehicles last year.
Rajeev Suri, Nokia President and CEO, 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.'
Looking ahead, Nokia now expects Nokia Networks' non-IFRS operating margin for 2014 to be slightly above 11 percent, compared to the previous projection of at or slightly above the higher end of the targeted long-term non-IFRS operating margin range of 5 to 10 percent.
Nokia continues to expect HERE to invest to capture longer-term transformational growth opportunities, while taking steps to increase focus on automotive and enterprise businesses. These investments will negatively affect HERE's 2014 non-IFRS operating margin, it believes.
The stock advanced 1.1 percent on Wednesday at 6.51 euros.
Copyright RTT News/dpa-AFX