Nokia on Thursday reported impressive growth in second quarter net sales and operating profit led primarily by a strong performance by its services division.
The Finnish vendor generated net sales of €3.2 billion in the three months to 30 June, up 9% on last year. Operating profit surged 51% to €521 million, while net profit came in at €347 million, compared to €2.5 billion in Q2 2014, when Nokia completed the sale of its handset business to Microsoft.
"Nokia delivered strong results in the second quarter, with each of our three businesses performing very well," said Nokia CEO Rajeev Suri, in a statement.
Nokia’s networks division, by far the company’s biggest single revenue driver, saw net sales climb to €2.73 billion from €2.57 billion, driven by Nokia Global Services, which grew sales 12% to €1.33 billion.
In its earnings report, Nokia attributed Global Services’ performance to growth at its network implementation, care, and planning and optimisation divisions, and to a lesser e xtent, systems integration. Network equipment sales increased 3% on last year to €1.39 billion, driven by ongoing demand for LTE.
"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," said Suri.
Nokia’s Here mapping business also continued to grow, generating sales of €290 million, up from €232 million in Q2 2014. The increase was driven by licence sales for embedded car navigation systems, which jumped 24% compared to last year.
Nokia is carrying out a strategic review of Here that could result in a sale. Multiple reports claim that a consortium of German carmakers that includes Audi, BMW, and Mercedes is the favourite to acquire the business.
"Our strategic review of that business is now in an advanced stage, and 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.
Meanwhile, Nokia’s patent-licensing division also turned in a strong performance, with net sales growing 31% to €193 million.
"With these results, we are well positioned to deliver on our full-year 2015 commitments," said Suri.
Nokia has forecast full-year revenue growth across the board, with an 8%-11% operating margin at its networks division, and a 9%-12% operating margin at Here.
