Nokia names Suri as CEO; reports solid Q1

Nokia names Suri as CEO; reports solid Q1

29 APR 2014

The new-look Nokia confirmed its anticipated appointment of Rajeev Suri (pictured) as its president and CEO, as it looks to enable its vision “to be a leader in technologies important in a connected world”.

The move came as the company reported solid results for the first quarter of 2014, focusing on the operation it has retained following the sale of the bulk of its loss-making Devices and Services unit to Microsoft.

Risto Siilasmaa, chairman of the company, said: “With the closing of our transaction with Microsoft, Nokia begins a new era. We are confident in our future. Nokia’s vision is to be a leader in technologies which will be important in a world of billions of intelligent connected devices.”

“I believe Rajeev is the right person to lead Nokia forward, and that his passion for technology will help ensure that Nokia continues to deliver technologies that have a positive impact on people’s lives,” he continued.

The company reported a profit from continued operations of €110 million, compared with a prior-year loss of €168 million, on revenue of €2.66 billion, down 15 per cent from €3.14 billion. Operating profit was €242 million, compared with a prior-year loss of €30 million.

In its Networks unit, now by far its biggest division, the company saw an operating profit of €179 million, up from €3 million in the same period in 2014, on revenue of €2.33 billion, down 17 per cent from €2.8 billion.

The company noted that its margin benefited from “a higher proportion of software sales, significant efficiency improvements in Global Services and a higher proportion of Mobile Broadband sales”.

The drop in sales was attributed to the divestment of non-core businesses, as well as the exit of certain customer contracts and countries, with foreign currency movements also playing a role.

For the Here navigation unit, there was an operating loss of €3 million, compared with a prior-year loss of €97 million, on revenue of €209 million, down from €216 million.

The company said that external net sales of €185 million were up 13 per cent year-on-year, driven by strong sales in the automotive market.

And for its Technologies business, operating profit was €83 million, compared with a prior-year profit of €73 million, on sales of €131 million, up from €123 million.

The unit entered into a licensing agreement with HTC, “validating Nokia’s implementation patents and enabling Technologies to focus on further licensing opportunities”.

Looking forward, Nokia said it expects net sales for the Networks unit to grow on a year-on-year basis in the second half of 2014, although it expects software sales to comprise a lower portion, which will negatively impact its margin.

It also said that during 2014, it “continues to expect Here to invest to capture longer term transformational growth opportunities”.

For its handset business during the first quarter, the company saw an operating loss of €326 million, compared with a prior-year loss of €120 million, on sales of €1.93 billion, down 30 per cent from €2.77 billion.

The company said the decreased revenue was “primarily due to lower Mobile Phones net sales and, to a lesser extent, lower Smart Device net sales”.

Mobile phone sales were impacted by “competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio”.

Smart Device sales suffered due to “competitive industry dynamics including the strong momentum of competing smartphone platforms”.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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