Nokia raises networks outlook after Q2 profit beats estimates

HELSINKI, July 24 Thu Jul 24, 2014 1:16am EDT

HELSINKI, July 24 (Reuters) - Finnish telecoms gear maker Nokia on Thursday reported a better than expected quarterly profit margin in its core networks unit and said its expectations for full year profitability have improved.

Nokia sold its phone division to Microsoft in April. After the deal, almost 90 percent of Nokia's sales come from network unit.

The Finnish company said its second-quarter operating profit for the networks business fell 14 percent from a year ago to 281 million euros ($378 million), well above the average expectation of 197 million euros in a Reuters poll.

Operating margin for the unit was 11 percent, compared with 7.7 percent in the poll.

Due to the strong results, Nokia raised its profitability guidance for 2014.

"Our expectations for the full year 2014 have improved and we now expect full year underlying profitability for Networks to be at or slightly above our long term target range of 5 to 10 percent," Nokia CEO Rajeev Suri said in a statement.

Nokia's group earnings per share in the quarter were 0.06 euros, ahead of the market expectation of 0.04 euros. ($1 = 0.7431 Euros) (Reporting by Sakari Suoninen; Editing by Jussi Rosendahl)