The bottom line was impacted by a charge of EUR 1.2 billion to write down the value of goodwill at the location services unit Here. This was offset by a one-time benefit of EUR 2.1 billion on deferred tax assets in Finland and Germany. After dividend payments in Q3, Nokia finished September with lower net cash of EUR 5.0 billion.
The strong operating results led to an upgrade in the outlook for Nokia Networks. The company now expects an annual operating margin of around 11 percent this year, versus its previous forecast for the high end of its long-term target range of 5-10 percent. The margin was 13.5 percent in Q3 and 11.5 percent over the first nine months of the year. The forecast is based on a high proportion of mobile broadband sales in Q3 and an expected higher proportion of service revenues in Q4. Nokia also expects higher capex at Networks this year, of EUR 250 million versus an earlier estimate of EUR 200 million, in order to increase capacity.
Net sales at Nokia Networks were up 13 percent year-on-year to EUR 2.94 billion. Global Services revenues fell 5 percent to EUR 1.27 billion, while mobile broadband sales rose 33 percent to EUR 1.67 billion. The higher share for mobile broadband led to the increase in operating margin. Sales growth was the highest in Greater China, up 38 percent to EUR 384 million, while Europe, the biggest market, increased by 9 percent to EUR 767 million.
Here reported net sales up 12 percent to EUR 236 million, while the operating result fell to breakeven from EUR 21 million a year ago. Sales growth was driven by vehicle licences and Microsoft phones. Nokia Technologies, the licensing division, contributed EUR 152 million in revenue, up 9 percent from a year ago.
