Nokia Oyj’s new chief Stephen Elop cut 1,800 jobs and delayed a key product after the world’s largest handset maker reported stronger-than-expected profits, according to a Reuters report.
Third-quarter underlying earnings per share (EPS) dropped to 0.14 euros from 0.17 euros a year ago, but solid demand for its cheap smartphones helped it beat all forecasts, which ranged from 0.08 to 0.12 euros, in a Reuters poll of 36 analysts.
Canadian Elop, a former Microsoft executive, took the helm on 21 September from Olli-Pekka Kallasvuo, who presided over a halving in Nokia’s market value during his four years in charge as smartphone rivals Apple Inc and Google Inc surged ahead.
Several analysts said they expected the average forecast for Nokia’s 2011 earning per share to rise 5 to 10 percent. Before the results were unveiled the consensus for underlying 2011 EPS was 0.67 euros.
Nokia stopped the profit slide this year through vigorous cost cuts. Now it plans to cut close to 3 per cent of the staff at its main business in a move that would hit most product creation at Symbian smartphones and its services organisation.
The company sold 110.4 million phones in the quarter, with its market share dropping to just 30 percent, missing all analysts expectations.
Nokia said it expects part shortages to continue weighing on the cellphone business into 2011, while it forecast its phone unit’s underlying operating profit margin to be 10-12 percent in the December quarter.
Moreover, Elop said he has decided to delay launching Nokia’s first product using the new MeeGo software platform, which is seen as the Finnish group’s key asset in the battle for a larger share of the high-end market.
“My assessment was that it would be a 2011 event,” he said.
