Nokia announces handset sale to Microsoft will ‘radically reshape the future’ as operating profits fall 29% from Q2
Nokia has today unveiled its Q3 results, revealing that net sales are now down 22 per cent year-on-year, while operating profits in the last quarter fell 29 per cent ahead of the brand selling its device and services business to Microsoft.
"The third quarter was among the most transformative in our company's history. We became the full owner of NSN and we agreed on the sale of our handset operations to Microsoft, transactions which we believe will radically reshape the future of Nokia for the better,” Timo Ihamuotila, Nokia CFO and interim president, said.
“Subject to the completion of the Microsoft transaction, Nokia will have significantly improved earnings profile, strong financial position and a solid foundation from which to invest.”
The deal, which is currently subject to shareholder approval, will see Nokia look to book a net gain on sale of approximately €3bn, with 32,000 staff members expected to move to Microsoft.
Nokia revealed in its reports what it plans to do following the sale of the division to Microsoft, with focus on three segments: NSN, looking at network infrastructure and services; Here, handling mapping and location services; and Advanced Technologies which will build on several of Nokia's current CTO and intellectual property rights activities.
The report stated that Nokia expects to see a 12 per cent increase in its NSN department’s operating margin in Q4, and expects to ‘deliver solid net sales growth on a sequential basis, supported by strong industry seasonality’.
Risto Siilasmaa, Nokia chairman and interim CEO, added: "Subject to the planned completion of the Microsoft transaction, Nokia will have three established businesses: NSN, Here and Advanced Technologies.
“Our strategy work is making good progress and it has already become clear that there are meaningful opportunities for all of our business areas: NSN, Here and Advanced Technologies. In all of these businesses, we have strong assets that we continue to invest in for the long term benefit of our customers and shareholders."
The company reported sales of Lumia smartphones up 19 per cent, with mobile phone volume increasing four per cent since Q2.
This comes on the same day as Apple reported a $7.5bn net profit for the last quarter.