2 Min Read
HELSINKI (Reuters) - Mobile network equipment maker Nokia Siemens Networks, which has been a drain on profits for owners Nokia and Siemens since its 2007 birth, reported record profits in the third quarter on the back of deals for new LTE networks.
Nokia Siemens underlying operating profit jumped to 323 million euros ($424 million) from 6 million a year earlier, beating all analysts' expectations and pulling underlying Nokia group result into the black.
Sales of the fourth-generation high-speed LTE network equipment in Japan and Korea helped to boost profits and lifted group sales 3 percent from a year ago to 3.5 billion euros, beating all analysts expectations in a Reuters poll.
A cost-cutting drive also helped the bottom line, and it forecast strong profits would continue in the current quarter.
The venture, which is the world's third largest wireless telecom gear maker, has struggled to make a profit due to fierce pricing competition from Chinese rivals and Sweden's Ericsson (ERICb.ST).
Last month Nokia Siemens said it was ahead of plan with its restructuring, which includes cutting a quarter of its staff, and should result in 1 billion euros in cost savings by the end of next year.
"Nokia Siemens Networks' result was amazing; it seems the cost savings are starting to push through," said analyst Mikko Ervasti from Evli Bank.
Smaller rival Alcatel-Lucent said on Thursday it plans to cut 5,490 jobs worldwide.
That job cuts announcement and the Nokia Siemens results lifted shares in the sector, with Ericsson up 2 percent and Alcatel up 6.8 percent.
($1 = 0.7621 euros)
Reporting by Tarmo Virki; Editing by Will Waterman