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Nokia shares surge as losses narrow in third quarter

Tuesday, 29 Oct 2013 | 11:27 AM ET
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Nokia shares closed nearly 7 percent higher on Tuesday after the company released its first financial results since announcing it was selling its handset division to Microsoft.

Operating profit came in at 118 million euros ($162 million) for the third quarter, compared to a loss of 564 million euros over the same period last year.

The Finnish mobile maker also narrowed its net loss to 104 million euros, against a 934 million euro loss in the third quarter of 2012.

There was also positive news for its Lumia smartphone range. Sales of its high-end devices continued to be strong, with a quarter-on-quarter rise in volumes of 19 percent to 8.8 million units. Volumes of its lower-end mobiles increased by 4 percent.

(Read More: Nokia, Microsoft attempt to rain on Apple's parade)

Nokia Group's net sales came in at 5.7 billion euros ($7.85 billion) for the third quarter of 2013, flat on the previous quarter and 22 percent lower than in the same period last year.

Nokia need to become 'clear number 3': Pro
Daniel Gleeson, mobile analyst at IHS, says that Nokia needs to establish itself as the third biggest player in the smartphone market to offer alternatives to Apple and Samsung.

"The third quarter was among the most transformative in our company's history. We became the full owner of NSN (Nokia Solutions and Networks) and we agreed on the sale of our handset operations to Microsoft, transactions which we believe will radically reshape the future of Nokia for the better," Timo Ihamuotila, Nokia chief financial officer and interim president said in a press release.

In September, software giant Microsoft announced it was to acquire the handset and services business of Nokia for $7.2 billion. The deal is expected to close in the first quarter of 2014 and is subject to approval by Nokia's shareholders and regulators. Nokia already uses Microsoft's Windows software to run its mobile phones.

(Read More: Nokia's failure: No flexibility in US, emerging markets)

However, Nokia's solutions and networks unit (NSN) - which will be its major focus after the handset acquisition - disappointed in the third quarter. Operating profit fell 9 percent on the year, while net sales slipped by 26 percent.

Nonetheless, Ihamuotila was confident that the unit generated "solid profitability" in a seasonally weak third quarter.

By CNBC.com's Matt Clinch. Follow him on Twitter @mattclinch81

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