Nokia Receives Boost from Handset Sale

Finnish tech company Nokia earned a profit during the second quarter after it sold it handset business to U.S. based Microsoft.

The company said it expectations have improved for the rest of 2014, as its performance financially during the latest three month period was helped by its sale to Microsoft.

Nokia earned a profit of 2.51 billion euros or $3.38 billion. Last year during the same period, the Finnish company lost 226 million euros.

The profit this year was buoyed by the gain of $3.2 billion euros for the sale in April of its mobile phone business to Microsoft.

Nokia, excluding its gain from that sale and its discontinued operations, had a net loss of 26 million euros for the second quarter. That was compared to a loss of 113 million euros for the non-handset device operations during the same reporting period last year.

Revenue was down from 31.6 billion euros to 2.94 billion euros, while income from operations was up from 12 million euros to over 284 million euros.

Following the sale of its handset business, Nokia’s main focus is on its successful mobile-network operations, which represent close to 90% of its total revenue. Its competitors in that business include Huawei Technologies from China and Ericsson from Sweden.

Nokia was long plagued due to over capacity and losses in its unit of mobile network. However, it returned to profitability in 2014, after leaving several area of the business and slashing its costs.

Nokia on Thursday raised its yearlong outlook for that unit and announced it expects the revenues for the network segment to increase during the second six months of this year, compared to one year ago.

The underlying profitability this year in the network business will reach or be slightly above the target range for the long term set by Nokia of between 5% and 10%.

Nokia’s decision to sell to Microsoft is handset business to focus solely on its mobile networks was cheered widely by analysts as well as investors. Nokia shares on Wednesday closed at 5.72 euros.

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