Nokia Posts Strong Results Ahead Of Alcatel-Lucent Merger

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Nokia in healthy shape ahead of Alcatel deal, return to smartphones and possible sale of HERE Maps

Nokia has reported strong quarterly results ahead of its proposed merger with French rival Alcatel-Lucent, with revenues rising by nine percent year-on-year to €3.2 billion (£2.24bn) and operating profits jumping by 51 percent from €346 million (£242m) to €521 million (£365m).

“Nokia delivered strong results in the second quarter, with each of our three businesses performing very well,” said CEO Rajeev Suri.

“I am particularly pleased by Nokia Networks, which delivered improved performance overall, despite a year-on-year decline in net sales on a constant currency basis. Software sales were up significantly; core networking sales improved; we saw a reduced impact of strategic entry deals; Global Services had one of its best quarters in the history of the company; and costs remained well under control.”

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Nokia Espoo HQNetwork revenues rose by six percent to €2.7 billion (£1.9bn), with profits going up 11 percent to €313 million (£219m), while HERE Maps, which is currently the subject of takeover speculation, increased sales by a quarter to €290 million (£203m).

“HERE continued to deliver well, again showing year-on-year sales and profitability growth,” continued Suri. “Our strategic review of that business is now in an advanced stage, and I would like to reiterate that our focus is on what is in the best interests of our shareholders and the long term future of HERE.”

Nokia Technologies is likely to receive a lot of attention over the coming months as it releases its virtual reality camera for the film industry and looks to create smartphone designs that can be licensed and built by other manufacturers. It has already done this in the tablet market with the N1, but is forbidden from doing the same by Microsoft in the smartphone market until 2016.

Revenues within the division were boosted by a licensing agreement with LG – the first major smartphone manufacturing partner since Nokia sold its devices and services unit to Microsoft – that will see the Korean manufacturer licence 80 standards essential patents for Nokia technology. Revenues rose by almost a third to €313 million (£219m) as profits inched up by 17 percent to €112 million (£78m).

“Nokia Technologies not only continued its licensing momentum in the quarter with a new agreement with LG, but also recently unveiled OZO, a truly game-changing virtual reality camera,” added Suri. “The team in “Tech” has shown both disciplined execution in licensing and an entrepreneurial spirit in pursuing new growth opportunities.”

The European Commission (EC) has given its blessing to the Alcatel-Lucent merger and if other regulatory approval is granted, the deal could be completed early next year. In contrast to Nokia’s healthy figures, Microsoft is still suffering the cost of acquiring Nokia’s device business, writing off billions earlier this month.

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