New Chief Executive Stephen Elop put his mark on Nokia, cutting 1,800 jobs and delaying a key product after parts shortages helped the world's largest handset maker post stronger-than-expected profits.
The Finnish phone company Nokia is to cut 1,800 jobs as it tries to restructure its smartphone business, despite announcing a strong rise in profits, revenues and average sale prices of its phones.
The company reported a third-quarter net profit of €529m (£469m), compared with a net loss at the same time last year of €559m due to restructuring costs. Net sales grew 5% to €10.2bn.
Third-quarter underlying earnings per share dropped to 0.14 euros from 0.17 euros a year ago, but solid demand for its cheap smartphones helped it beat all forecasts -- which ranged from 0.08 to 0.12 euro -- in a Reuters poll of 36 analysts.
Canadian Elop, a former Microsoft executive, took the helm on September 21 from Olli-Pekka Kallasvuo, who presided over a halving in Nokia's market value during his four years in charge when smartphone rivals Apple and Google surged ahead.
The strong numbers on Thursday sent Nokia shares more than 9 percent higher. They were up 6.5 percent by 1400 GMT.
Nokia sold 110.4 million phones in the quarter, with its market share dropping to just 30 percent, missing all analysts expectations.
Nokia said it expects part shortages to continue weighing on the cellphone business into 2011, while it forecast its phone unit's underlying operating profit margin to be 10-12 percent in the December quarter.
Elop has warned the company that it needs to take advantage of the disruption in the mobile market to prosper. He has moved quickly to focus the company on its smartphone business, which is seen as an essential growth path for the mobile handset division of the company, which accounts for most of its revenues.
The company is shaking up the product development of its smartphones as it tries to compete for profitability with the competition from Apple's iPhone, Research In Motion's Blackberry and Google's Android software. Nokia employs about 131,500 people, with 66,000 of those at its Nokia Siemens Networks joint venture, which focuses on telecoms networks.
Nokia is benefiting from a boom of cheap smartphones -- with Strategy Analytics saying on Thursday the overall smartphone market jumped 78 percent year-on-year in the quarter -- but it has lacked a high-end hit model since the N95, launched in 1996.
Nokia's N8 model, its first serious rival to Apple's iPhone, started shipping on the last day of September and sales are yet to start on many markets.
The choice of a North American executive was largely seen as reflecting the increasing dominance of US and Canadian companies in the evolution of the top-end mobile phone business.
Elop had risen rapidly over the past five years from CEO of Web software maker Macromedia to chief operating officer of Juniper Networks to head of Microsoft's Business Division, which makes Office software.
(C) REUTERS, guardian
This multinationational corporation just amasing weath for themself. They sat on trillion dollars and they refused to hire people instead firing worker and blaming it on Obama. You making profit you don't blame on Obama. The greedy executives. God will punish them.
ReplyDelete