Nokia names leader of networks business turnaround as CEO

HELSINKI, Apr 29 (Reuters): Nokia named the man who led a turnaround at its main telecoms network business as its new chief executive on Tuesday, boosting investors' confidence in the future of the company following the sale of its once dominant handset arm.
The Finnish firm, which completed the 5.6 billion euro ($7.8 billion) deal to sell its mobile handset business to Microsoft on Friday, said Rajeev Suri would become its CEO on May 1, replacing Stephen Elop who is moving to Microsoft.
It also announced forecast-beating quarterly results, driven by cost-cutting and software deals at its networks arm, formerly called NSN, and plans to return $3.1 billion to shareholders, helping to send its shares over 7 per cent higher.
"Mr. Suri has done a very commendable job in turning around NSN, in our view. Thus, we see the market being positive about his appointment," JP Morgan Cazenove analysts said.
Suri, a 46-year-old Indian national, was widely expected to lead the company following the sale of the handset business.
Nokia's networks division accounted for about 90 per cent of sales from the group's continuing businesses last year. But analysts say it faces challenges, as higher research and development costs give bigger, deep-pocketed telecom equipment makers such as industry leader Ericsson and China's Huawei an advantage.
Still, Nokia beat expectations with a core operating profit margin of 9.3 per cent in the first quarter, well ahead of the 5.7 per cent average forecast by analysts polled by Reuters.
The margin is also expected to remain at the higher end of a 5-10 per cent target for this year, the company added.
"On first-quarter results, NSN steals the show with a solid margin beat and expanded 2014 (guidance)," Jefferies analysts Lee Simpson and Robert Lamb said in a note.