Nokia’s financial performance improves following sale of handset business to Microsoft

Now free of the burden caused by its losing handset business, Nokia is bullish 2014 will bring a renewed growth of its share price and improved financial performance going forward. The Finnish company recently concluded the sale of its mobile device and services business to Microsoft for $7.2 billion in May.

During the second quarter of its fiscal year 2014, Nokia’s net profit climbed to $3.4 billion from a year-over-year loss of $304 million. The profit surge could be attributed to its newfound focus on its mobile-network business, which it recently operated in coordination with Siemens. That business unit has been responsible for 90 percent of Nokia’s profit.

In 2013, Nokia completely took over the wireless network business from Siemens for $2.3 billion, giving the company full advantage of its operations and market performance. Before, the business had faced a series of setbacks from overcapacity and debts. Thankfully, it was quick to recover its former strong market performance and Nokia was able to stand again, partly from implementing a major restructure in the business unit.

Nokia, upbeat of the mobile network business’ performance in the second half of the year, expects the unit to achieve 5 percent to 10 percent of revenue growth. The positive outlook is based on its current trend of profitability.

Due to changes in the foreign-exchange rate and the lingering impact of its recent restructuring, Nokia’s revenue for the second half for the network business declined 8 percent compared to its previous performance year-on-year.

But the sale of Nokia’s handset business was just part of a larger divestiture of the company in 2013 in a move to shift its sole focus on its mobile-broadband segment, in addition to ending several contracts. Now, the Tampere, Finland-based company is hoping the sale of many parts of the company will usher in a boost to its mobile network initiatives. This as Nokia executives expect the European mobile phone carriers to step up their spending on the 4G networks. So the major market that the company intends to focus on is Europe, where it is seeing great momentum for business opportunities.

On top of its mobile network business, Nokia also provides digital mapping platforms for the navigation systems of vehicles and to major customers such as Amazon and Microsoft. Furthermore, it holds vast potential of technologies that could see the light of day anytime in the near future with its patents. Nokia also looks to make major acquisitions soon after buying five small businesses in the second quarter of 2014.