Nokia raises Networks guidance despite Q3 revenue slip

Nokia on Thursday raised its guidance for its Networks division, despite reporting a slight decline in third quarter revenue. The deal is expected to close in the first quarter of 2016.

The Finnish company said it would return four billion euros (USD 4.4 billion) to shareholders in the coming years through dividend payments and share buybacks.

With the positive growth, Alcatel-Lucent has beaten Nokia Networks in terms of revenue growth in Q3 2015.

In the quarter, adjusted operating income was 212 million euros, 42 percent higher than last year’s 170 million euros.margin also improved 100 basis points to 6.2 percent. Nokia’s share price surged about 10 percent in Helsinki Stock Exchange Market two hours after the company’s report was published. This is a revision from the previous projection of around the midpoint of the long-term range of 8 – 11 percent for the full year.

Alcatel-Lucent’s third-quarter sales rose 5 percent to 3.4 billion euros, boosted by growth in Europe.

The market reacted positively to Nokia’s third quarter achievements.

“That programme, in my view, provides an excellent balance of significant capital return to shareholders while still ensuring we have strategic flexibility for the future”, Suri said.

French and Chinese authorities gave the green light for the takeover of Alcatel-Lucent this month, the last major antitrust approvals needed.

Analysts had been wary about Nokia’s earnings after Ericsson posted disappointing results, citing slowing demand in China.

Nokia’s net sales and operating profit (non-IFRS) grew strongly in the period from January to September of 2015, and the company’s performance in Chinese market seemed to have a remarkable contribution to the result.