Nokia phones in profit
Driven by smartphone sales, Nokia's third-quarter earnings turn to the black following a loss a year earlier.
Nokia's earnings returned to the black in the third quarter thanks to smartphone sales, but it also announced 1,800 layoffs.
The Finnish mobile phone maker said today that it took home a profit of 529 million euros ($741 million) in the third quarter compared with a loss of 559 million euros in the year-ago quarter. Revenue rose almost 5 percent to 10.3 billion euros from 9.8 billion euros a year back earlier.
Surpassing analyst expectations, the third-quarter results were boosted by higher selling prices on Nokia smartphones. For the quarter, the company's Devices and Services unit pulled in sales of 7.2 billion euros, an increase of 4 percent from a year ago.
Operating profits also turned positive, hitting 423 million euros after a 426 million euro loss in last year's quarter.
Sales of higher-end, or "converged," mobile devices (smartphones and mobile computers) hit 26.5 million units, jumping 61 percent from a year ago. Altogether, Nokia sold a total of 110.4 million mobile devices, up 2 percent from last year.
The solid quarter was welcome news to Nokia's new CEO, Stephen Elop, who took the reins from Olli-Pekka Kallasvuo last month.
"In the five weeks since joining Nokia, I have found a company with many great strengths and a history of achievement that are second to none in the industry," Elop said in a statement. "And yet our company faces a remarkably disruptive time in the industry, with recent results demonstrating that we must reassess our role in and our approach to this industry."
Nokia still faces a tough, competitive climate. The company announced today that it plans to streamline some of its operations, notably in its Symbian smartphone unit. That move and others will lead to the layoffs of some 1,800 employees worldwide.
Looking ahead, Nokia expects fourth-quarter sales from its Devices and Services unit to reach between 8.2 billion euros and 8.7 billion euros, though its overall mobile device market share will be down slightly from last year. The company has held its position as the world's leading mobile phone maker but has slowly and steadily been dripping market share to rivals such as Apple, HTC, and Research In Motion. And though it's a leader in Europe, Nokia has struggled to carve out a significant share of business in North America.
This past spring, Nokia embarked on yet another reorganization to shake up and simplify its divisions and speed up the launch of new products. The company has also admitted its failure to effectively target North American consumers and is looking for ways to improve its focus on the U.S. market.