Nokia to Give Billions Back to Shareholders Even as Sales Dip

Nokia said it would distribute 4 bn Euros to shareholders, despite a drop in third quarter earnings.

Nokia will distribute 4 billion Euros to shareholders. (Photo: Reuters)

Telecom networks company Nokia saw its shares rise on Thursday after it raised its outlook for the year and said it would distribute 4 billion euros ($4.4 billion) to shareholders, despite a drop in third quarter earnings.

CEO Rajeev Suri said that although he was not pleased with overall sales, the profitability of the networks sector – which accounts for 95 percent of revenue – allowed Nokia to raise its full-year forecast.

<p>Our strong profitability is testament to the strength of our operating model. We said earlier in the year that we would redouble our efforts to ensure our cost structure was aligned to market conditions, and the success of those efforts is very clear in our results</p>

<p><b>Rajeev Suri, CEO, Nokia</b></p>

Sami Sarkamies, senior analyst at Nordea Bank said the result was “excellent, with a positive surprise” from the networks unit.

Lower sales in North America and Europe were partly offset by a 27 percent increase in sales in greater China, both in broadband and global services.

Nokia Corp. has shown signs of improved fortunes since selling off its ailing cellphone unit to Microsoft for 5.4 billion in 2013. In August, it announced the sale of its HERE mapping business – valued at some 2.8 billion euros ($3.1 billion) – to a consortium of German automakers Audi, BMW and Daimler.

Nokia employed more than 57,000 people in the quarter, up more 8 percent on a year earlier.