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Nokia unveils new CEO, starts new era with profit beat

Rajeev Suri, chief executive officer of Nokia.
Henrik Kettunen | Bloomberg | Getty Images
Rajeev Suri, chief executive officer of Nokia.

Slimmed-down telecommunications firm Nokia unveiled a new CEO on Tuesday and reported net profit for its network equipment business that beat expectations.

Operating profit at its networks business known as NSN - its core unit now that its handset unit has been sold to Microsoft - saw a 10 percent rise year-on-year in the first quarter. This beat analysts' expectations in a Reuters poll. For the group as a whole, sales in the first quarter came in at 2.7 billion euros ($3.7 billion) and the group earned 0.04 euros share, against the 0.08 euros seen in the fourth quarter of 2013. Nokia added that it would return an extra 1 billion euros to shareholders from the sale of its phone unit.

With Nokia now focusing on NSN, which accounts for nearly half of Nokia's total revenue, the company has announced Rajeev Suri will take the helm.

Shares in the group jumped 6 percent in opening deals in Europe.

Read MoreNokia sealsMicrosoft deal amid new CEO speculation

In 2011, Suri undertook an aggressive restructuring drive that saw around 17,000 jobs axed at the unit in an attempt to make it more profitable. Suri was largely credited with the turnaround and analysts believed he was a natural choice for the company. In 2013, the networks unit posted operating profits of 1.1 billion euros, up 39 percent from the year before.

"Rajeev is the right person to lead the company forward," Nokia Chairman Risto Siilasmaa said in a statement. "He has a proven ability to create strategic clarity, drive innovation and growth, ensure disciplined execution, and deliver results."

U.S. technology giant Microsoft finally completed its acquisition of Nokia's devices and services business on Friday. The two companies had forged a partnership to produce several well-received smartphones in recent years but Nokia has struggled with market share over the past few years, with the emergence of Apple and Samsung.

Read MoreDigital mapping maybe Nokia's hidden jewel

This hasn't deterred Microsoft, with Friday's transaction totaling 5.44 billion euros ($7.5 billion), up from the 5.4 billion euros price tag originally announced last year.

Siilasmaa added in Tuesday's press release that Nokia has now begun a "new era" and he was of its future.

"With our strategic direction now set, our highly talented teams can focus fully on realizing our vision by building on Nokia's three strong businesses – Networks, HERE, and Technologies. In all three businesses, Nokia has a solid foundation and we continue to see attractive opportunities to invest in growth," he said.


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