Nokia’s share price up, posts a €2.51 billion Q2 profit and boosts full-year profitability forecasts

Nokia announced improving results from the second fiscal quarter and increased its full-year profitability projection, with China networking contracts leading the rally and cost-reduction efforts paying off.

According to the statement of Nokia, its net profit over the second three months was reported at €2.51 billion ($3.38 billion) compared to the €226 million loss posted over the same period a year earlier. Nokia also shared that its revenue declined from €3.16 billion to €2.94 billion. The companys operating income increased from €12 million to €284 million.

Excluding the money raised from the handset unit sale and discontinued operations, the company posted a €26 million net loss in comparison to the €113 million net loss for its non-device business a year ago.

“This was a very strong report in every aspect,” Mikael Rautanen, analyst at Inderes, said for Reuters. “Networks profitability was above all expectations, and as a cherry on top, they raised the network units full-year profitability guidance.”

In addition to announcing its results from the second quarter, Nokia upgraded its profitability forecasts. Its network units operating profit is expected to be slightly above the high end of its target range between 5 and 10% in 2014.

Mr. Rajeev Suri, who took the position of Chief Executive Officer of Nokia in May said in the companys statement, which was cited by Reuters: “Our expectations for the full year 2014 have improved and we now expect full-year underlying profitability for Networks to be at, or slightly above, our long-term target range of 5 to 10 percent.”

Nokia added 7.26% to trade at 6.13 euros per share by 9:18 GMT, marking a one year change of +111.65%. According to information published on the Financial Times, the 34 analysts offering 12-month price targets for Nokia have a median target of 5.45, with a high estimate of 8.40 and a low estimate of 4.40. The median estimate represents a -4.72% decrease from the last price of 5.72.