Nokia to cut 1,800 jobs

Saturday, 23 October 2010 06:36 - - {{hitsCtrl.values.hits}}

HELSINKI (Reuters) - Nokia Oyj’s new chief Stephen Elop put his imprint on the company on Thursday, cutting 1,800 jobs and delaying a key product after the world’s largest handset maker reported stronger-than-expected profits.

Third-quarter underlying earnings per share (EPS) dropped to 0.14 euros from 0.17 euros a year ago, but solid demand for its cheap smartphones helped it beat all forecasts -- which ranged from 0.08 to 0.12 euros -- in a Reuters poll of 36 analysts.

Canadian Elop, a former Microsoft executive, took the helm on 21 September from Olli-Pekka Kallasvuo, who presided over a halving in Nokia’s market value during his four years in charge as smartphone rivals Apple Inc and Google Inc surged ahead.

The strong numbers on Thursday sent Nokia shares up more than 9 percent to their highest level in 20 weeks. They closed in Helsinki up 6.3 percent and were 5.9 percent higher in New York at 1531 GMT.

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

Several analysts said they expected the average forecast for Nokia’s 2011 earning per share to rise 5 to 10 percent. Before the results were unveiled the consensus for underlying 2011 EPS was 0.67 euros.

Nokia stopped the profit slide this year through vigorous cost cuts. Now it plans to cut close to 3 percent of the staff at its main business in a move that would hit most product creation at Symbian Smartphones and its Services organisation.