Nokia names new CEO, eyes change after quarterly loss of $239 million
Rajeev Suri, the Indian-born former head of Nokia Solutions and Networks, will become Nokia's CEO on May 1.
Nokia is planning for a turnaround now that it has sold its lossmaking handset business to Microsoft, naming on Tuesday a new CEO, promising dividends again and laying out its vision for its remaining operations.
For the first quarter, the last for which it will include figures for its cellphones unit, Nokia said its net loss was 239 million euros (173 million) compared with a loss of 272 million a year earlier. Revenue fell to 2.6 billion euros from 3.1 billion euros, with mobile device sales plunging 30 percent.
To lead the Finnish company in its focus on the remaining businesses of networks, software, and maps, it named Rajeev Suri, the Indian-born former head of Nokia Solutions and Networks, to become CEO on May 1. The 46-year-old, who joinedNokia in 1995, has been largely credited with a turnaround in the company's networks sector.
Nokia Corp.'s share price shot up 4.5 percent to 5.37 euros in Helsinki having earlier traded 8 percent higher.
That was also due to plans to invest 5 billion euros to "optimize its capital structure," and to restart paying dividends and distributing "excess capital to shareholders."
The company, which has struggled with the decline of its mobile phones business since it was the world's largest with a 40-percent market share in 2008, will now focus on remaining operations — networks, mapping services and technology development and license — under Suri's leadership.
After the April 25 closing of the 5.44 billion-euro ($7.5 billion) sale of its devices and services division and a license to a portfolio of patents to Microsoft Corp., Nokia said the deal was increased by about 170 million euros because of estimated adjustments made for net working capital and cash earnings.
Suri said the new company will continue expansion of its networks business, which serves 90 of the world's 100 largest operators, and will focus on its mapping services for car navigation systems, where it has an 80 percent market share with its HERE maps.
The technology division will further invest in improving its innovation portfolio and explore new technologies with a team that includes hundreds of scientists and engineers.
"Nokia's strategy is to develop its three businesses in order to realize its vision of being a technology leader in a connected world and, in turn, create long-term shareholder value," said Suri, who described Nokia as one of the world's largest software companies.
Nokia, which began as a maker of paper and gum boots in 1865, transformed into a home electronics company before becoming an innovator in the wireless industry from where it moved into mobile telephony. But it was unable to sustain its role as the trendsetter because of tough competition both from the smartphone sector with the likes of Apple Inc.'s iPhone, Samsung Electronics and cheaper phone makers in Asia.
Several Nokia models flopped and the company failed to sense popular trends such as touchscreen models and folding clamshell phones. Its operating systems also lagged behind, particularly compared with Google's popular Android.
In an attempt to reverse the slide, it teamed up with Microsoft in 2011, replacing its old operating system with one based on Windows, but consumers didn't warm to the Windows Lumia handsets.
As part of the Microsoft deal, 25,000 Nokia employees, including 4,700 in Finland, moved over to the U.S. giant, leavingNokia with 55,300 workers worldwide.
Its headquarters in Espoo, near the Finnish capital Helsinki, was taken over by Microsoft last weekend and the company moved its personnel to a new head office nearby.