HELSINKI: Nokia achieved an increased turnover and made a remarkable profit during the second quarter of 2015, the Finnish network technologies company said here the other day.
Compared with the same period in 2014, the 2015 April-June turnover stood at 3.2 billion euros, which was an increase of 9 percent. The profit was now 352 million euros, whereas in 2014 it had been negative.
Among the three major business portfolios, namely the Networks, Technologies and the HERE map services, Networks provided 313 million euros out of the total of 521 operating profit (non-IFRS).
Mikael Rautanen, an analyst of Nokia from the analysis firm Inderes, told Finnish national radio Yle that the increase in the turnover could be attributed to changes in the exchange rates that were advantageous to Nokia, and the good profit result showed a recovery in the core business of Nokia, the network services.
Rautanen said the market situation was not easy, but Nokia was able to improve its profitability more than its main competitor Ericsson.
Rautanen believed that in the network business the importance of programming increases. “In the future the programmes that administer the networks bring the money, not that much the sales of hardware,” he said.
Nokia CEO Rajeev Suri said the company’s Global Services segment attained one of its best results ever; sales of programming grew remarkably, while the impact of new strategic agreements declined.
Suri did not comment in detail about the expected sale of its map service HERE. He said the assessment of strategic alternatives has reached advanced stage.
He noted that both the profitability and sales of HERE grew. He said that Nokia focuses on what is good for the shareholders and HERE in the long term.
HERE provided an operating profit of 27 million euros in Q2, while it did not generate any profit for the same period last year.
Earlier this week, Nokia announced the launch of a new ball like camera named Ozo. It has been designed as a tool for the virtual reality industry. However, analyst Rautanen told Yle that the importance of the new gadget will be marginal in the short term.
Rautanen said the upcoming merger of Nokia and Alcatel-Lucent involves a huge risk. “If it works out, we will be able to say Nokia has chosen the right strategy,” he said.
The current annual turnover of Nokia is around 15 billion euro and following the completion of the Alcatel-Lucent deal it will be around 30 billion.
The merger with Alcatel-Lucent has cleared governmental approvals and awaits Nokia shareholders’ blessing.
Rautanen pointed out that uncertainty associated with the upcoming merger has been reflected in the price of the Nokia stock. It was 7.5 euros at the time of the announcement and has since declined to 6 euros.
On Thursday, following the announcement of Q2 results, the share showed a value increase of 8 percent.
