CORRECTED – UPDATE 3-Nokia to cut 1,800 jobs after strong Q3

(Corrects year-ago EPS to 0.17 euro from 0.18 in para 2)

* To cut 1,800 jobs, 3 percent of staff

* Q3 underlying EPS 0.14 euro vs 0.10 euro poll average

* Phone sales price up yr/yr first time in years

* Cellphone market share drops to 30 percent

* Shares up as much as 9.1 percent

(Adds quotes, detail)

By Tarmo Virki, European Technology Correspondent

HELSINKI, Oct 21 (BestGrowthStock) – Nokia (NOK1V.HE: ) reported
stronger-than-expected profits for the third quarter, boosted by
solid demand for its cheap smartphones, and said on Thursday it
would cut up to 1,800 jobs under its new chief executive.

Third-quarter underlying earnings per share for the world’s
largest handset maker dropped to 0.14 euros from 0.17 euros a
year ago, but beat all forecasts — which ranged from 0.08 to
0.12 euro — in a Reuters poll of 36 analysts.

The results were the first since Canadian Stephen Elop took
over at the helm on Sept. 21 from Olli-Pekka Kallasvuo, who
presided over a halving in Nokia’s market value during his four
years in charge. [ID:nLDE68903W]

The strong numbers sent Nokia shares more than 9 percent
higher. They were up 6.5 percent by 1225 GMT.

“I think it’s an excellent report given that the company’s
portfolio of products was very weak in the quarter,” said Morgan
Stanley analyst James Dawson.

“The handset profits are 30 percent ahead of expectations,
so it’s clearly a very big beat versus what the market was
looking for,” Dawson said.

In its key phone unit Nokia was able to increase the average
sale price to 65 euros — the first annual price rise in almost
a decade — as new, cheap smartphones like the C5 and the E5
went on sale over the summer.

“It’s about selling family cars rather than sports cars —
that’s where Nokia is making the money,” said Gartner analyst
Carolina Milanesi.


For more analyst reaction see [ID:nLDE69J22U]

For story on Nokia Siemens results [ID:nSAB023704]

For a Special Report on Elop see:


Nokia shares have still dropped around 7.5 percent so far
this year — mostly due to problems on the fatter-margin
high-end market — compared with a 10 percent gain in the STOXX
Europe 600 technology index (.SX8P: ).

Nokia’s N8 model, its first serious rival to Apple’s
(AAPL.O: ) iPhone, started shipping on the last day of September
and sales are yet to start on many markets.

Nokia sold 110.4 million phones in the quarter, with its
market share dropping to just 30 percent, missing all analysts
expectations. The Finnish group suffered like smaller rival Sony
Ericsson (6758.T: )(ERICb.ST: ) from component shortages.

Nokia said it expects part shortages to continue weighing on
the cellphone business into 2011, while it forecast its phone
unit’s underlying operating profit margin to be 10-12 percent in
the December quarter.

Analysts had expected a margin of 11.4 percent in the poll.

Nokia said the 1,800 job cuts — close to 3 percent of staff
at its main business — would hit most product creation business
in its Symbian Smartphones organisation and its Services

New CEO Elop had risen rapidly over the past five years
from CEO of Web software maker Macromedia to chief operating
officer of Juniper Networks (JNPR.O: ) to head of Microsoft’s
(MSFT.O: ) Business Division, which makes Office software.

(Additional reporting by Terhi Kinnunen and Victoria Klesty in
Helsinki, Johannes Hellstrom and Helena Soderpalm in Stockholm;
Editing by Michael Shields)

CORRECTED – UPDATE 3-Nokia to cut 1,800 jobs after strong Q3