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Growing Here and LG deal give Nokia a healthy-looking second quarter

Nokia's shares rose eight percent on Thursday after reporting a better than expected second quarter.
Written by Liam Tung, Contributing Writer

Things are looking up for Nokia after the company beat analysts' expectations for its second quarter earnings.

Nokia's share price rose eight percent on Thursday thanks to better than expected profits and strong software sales. The Wall Street Journal reported that Nokia's net profit of €347m for the quarter easily beat an analyst forecast of €209m.

The company, which recently announced plans to acquire rival Alcatel-Lucent for €15.6bn, reported overall second quarter operating profits of €503m with net sales of €3.2bn, up nine percent on last year.

Its network division's contribution to revenue was €2.7bn for the quarter, up six percent on last year, while its Here mapping business saw a 25 percent year on year gain to €290m. Revenues from Nokia Technologies, which launched the new Ozo virtual reality camera yesterday, was up 31 percent to €193m thanks in part to new a licensing deal with LG.

"Nokia delivered strong results in the second quarter, with each of our three businesses performing very well," Rajeev Suri president and CEO, said.

"While we expect the telecom infrastructure market to remain challenging, I believe that our disciplined operating model and strong execution capabilities will continue to differentiate us in this environment. Additionally, we remain highly focused on reducing costs and improving efficiency in order to mitigate the impact of market conditions."

Alcatel-Lucent, which reported a mixed second quarter today, confirmed the Nokia deal is on track to be completed on the "early part" of the timeframe the company gave, Reuters reported.

The deal is expected to close in the first half of 2016 and has now received approval from competition regulators in the US and Europe but is waiting for the green light from China.

The company is reportedly in talks with Audi, BMW, and Daimler to buy its Here business for €2.5bn.

Suri said its review of that business, which was announced alongside the planned merger with Alcatel-Lucent, is "now in an advanced stage".

"I would like to reiterate that our focus is on what is in the best interests of our shareholders and the long term future of Here," Suri said.

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