Nokia to cut 1,800 jobs after strong Q3
Helsinki, October 21, 2010
Nokia reported stronger-than-expected profits for the third quarter, boosted by solid demand for its cheap smartphones, and said on Thursday it would cut up to 1,800 jobs.
Third-quarter underlying earnings per share for the world's largest handset maker dropped to 0.14 euros ($0.19) from 0.18 euros a year ago, but beat all forecasts -- which ranged between 0.08 to 0.12 euro -- in a Reuters poll of 36 analysts.
The results were the first since Canadian Stephen Elop took over at the helm of Nokia on Sept. 21 from Olli-Pekka Kallasvuo, who presided over a halving in Nokia's market value during his four years in charge.
In its key phone unit Nokia was able to increase average sales price to 65 euros -- the first annual price rise in almost a decade.
"I think it's an excellent report given that the company's portfolio of products was very weak in the quarter," said Morgan Stanley analyst James Dawson.
"The handset profits are 30 per cent ahead of expectations, so it's clearly a very big beat versus what the market was looking for," Dawson said.
The strong numbers sent Nokia shares 8 per cent higher by 1100 GMT.
Nokia said job cuts -- close to 3 per cent of staff at its main business -- would hit most product creation business in its Symbian Smartphones organisation and its Services organisation.
"The guidance for Q4 is more or less in line with expectations. It is positive that they focus on costs," said analyst Martin Nilsson from Handelsbanken. – Reuters