The company's main division Devices & Services met its outlook for an adjusted operating margin of around minus 2 percent, with a result of 1.6 percent, and revenues improved sequentially by 6 percent to EUR 2.898 billion, thanks to quarterly growth in shipments of both smartphones and feature phones.
Nokia shipped 8.8 million Lumia smartphones in the third quarter, up 40 percent year-on-year and 19 percent more than in Q2. Feature phone shipments rose 4 percent from Q2 but were still down 27 percent from a year ago to 55.8 million. Sequential growth was led by North America, with 1.4 million shipments, and included 17 percent growth in both Europe and Asia-Pacific. The smartphone average selling price was down 9 percent form the previous quarter to EUR 143, while feature phones rose by 4 percent over the same period to an average EUR 27.
The navigation division Here reported sales down 20 percent from a year earlier to EUR 211 million, hurt by forex effects and the slower PND market. Lower internal sales also pushed the adjusted operating margin lower, to 9.5 percent from 14.0 a year earlier.
Nokia maintained its annual targets for cost reductions at NSN and Devices & Services and said it expects a seasonal improvement in NSN's results in Q4. Nokia said it expects Devices & Services to remain in the red in Q4, when it will start reporting the unit as discontinued activities, pending completion of the planned sale of the mobile phone business to Microsoft in Q1 2014.
The company is still conducting a strategic review of its remaining activities, but said it will return any excess capital after the close of the mobile phone sale to shareholders. Nokia ended September with net cash of EUR 2.4 billion, or pro forma for the closing of the Microsoft deal, EUR 7.5 billion.
