By Sven Grundberg
STOCKHOLM--Finland's mobile-network maker Nokia Corp. (NOK) said
its expectations for 2014 have improved, as its financial
performance in the latest quarter was boosted by the sale of its
handset business to Microsoft Corp. (MSFT)
Nokia swung to a second-quarter net profit of €2.51 billion from
a year-earlier loss of €226 million, buoyed by a €3.2 billion gain
from the sale of its handset business to Microsoft in late
April.
Nokia, excluding the gain from the sale and discontinued
operations, reported a €26 million net loss in the second quarter,
compared with a €113 million loss for the non-device operations in
the same period a year earlier.
Revenue fell to €2.94 billion from €3.16 billion, while
operating income increased to €284 million from €12 million.
After the sale of the handset operations, Nokia's main business
is now its mobile-network unit, which accounts for almost 90% of
revenue and competes with Sweden's Ericsson and China's Huawei
Technologies Co.
Long plagued with losses and overcapacity, the mobile-network
unit returned to profitability last year, after slashing costs and
exiting several areas of business. On Thursday, Nokia raised its
outlook for the unit and said it expects revenue for the network
business to grow in the second half compared with a year earlier.
Underlying profitability for network this year will be at, or
slightly above, Nokia's long-term target range of 5% to 10%, the
company said.
Nokia's move to sell its ailing handset business to Microsoft to
focus on mobile networks has been widely cheered by investors and
analysts. On Wednesday, Nokia shares closed at €5.72.
Write to Sven Grundberg at sven.grundberg@wsj.com
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