Helsinki: Nokia named the man who led a turnaround at its main telecoms network business as its new chief executive on Tuesday, boosting investors’ confidence in the future of the company following the sale of its once dominant handset arm.
The Finnish firm, which completed the 5.6 billion euro ($7.8 billion) deal to sell its mobile handset business to Microsoft on Friday, said Rajeev Suri would become its CEO on May 1, replacing Stephen Elop who is moving to Microsoft.
It also announced forecast-beating quarterly results, driven by cost-cutting and software deals at its networks arm, formerly called NSN, and plans to return $3.1 billion to shareholders, helping to send its shares over 7 percent higher.
“Mr. Suri has done a very commendable job in turning around NSN, in our view. Thus, we see the market being positive about his appointment,” JP Morgan Cazenove analysts said.
Mr Suri, a 46-year-old Indian national, was widely expected to lead the company following the sale of the handset business.
Nokia’s networks division accounted for about 90 percent of sales from the group’s continuing businesses last year. But analysts say it faces challenges, as higher research and development costs give bigger, deep-pocketed telecom equipment makers such as industry leader Ericsson and China's Huawei an advantage.
Still, Nokia beat expectations with a core operating profit margin of 9.3 percent in the first quarter, well ahead of the 5.7 percent average forecast by a poll.
The margin is also expected to remain at the higher end of a 5-10 percent target for this year, Nokia added.
