Nokia Names Rajeev Suri as CEO, Gives Extra Dividend
April 29, 2014 2:14 PM EST
Rajeev Suri will become the new chief executive of Finnish telecommunications gear maker Nokia (NOK1V.HE), the company said on Tuesday, adding that it would return an extra 1 billion euros to shareholders from the sale of its phone unit.
File picture shows a man walking past a Nokia logo during the Mobile World Congress in Barcelona, February 28, 2012. Nokia gave an upbeat forecast for its telecom equipment unit Nokia Solutions and Networks (NSN), giving hope for a pickup in what will be the Finnish company's main business after the sale of its phones division to Microsoft. Shares in Nokia rose 6 percent after the company forecast NSN's profit margin would improve in the fourth quarter to around 12 percent, plus or minus 4 percentage points, from 8.4 percent in the third quarter. Picture taken February 28, 2012.
Suri, 46, until now led Nokia Solutions and Networks (NSN), the smaller network equipment unit of Nokia when the company still made mobile phones.
Suri is credited with turning the unit around, and last year it contributed most of the 12.7 billion euro ($17.58 billion)turnover Nokia made from its continuing operations.
"Rajeev is the right person to lead the company forward," Nokia Chairman Risto Siilasmaa said in a statement. "He has a proven ability to create strategic clarity, drive innovation and growth, ensure disciplined execution, and deliver results."
Last year, the NSN unit's sales were 11.3 billion euros, while navigation unit HERE accounted for 914 million euros and its patent unit, dubbed advance technologies, 529 million euros.
Nokia finalised the around 5.4 billion euro ($7.5 billion) sale of its struggling mobile phone business to Microsoft (MSFT.O) on Friday. It said it would now focus on its three remaining businesses that cover networks, navigation and patents.
The network unit was long in the red, but turned profitable in 2012 after Suri slashed costs and shed unprofitable business.
Analysts say management now needs to concentrate on winning more contracts as higher research and development costs mean bigger, deep-pocketed rivals have an advantage.
Nokia has said it would make an aggressive push this year to gain market share against industry leader Ericsson (ERICb.ST) as well as Chinese rival Huawei. Nokia has also said it aims for year-on-year sales growth in the second half.
The company also said it would pay stakeholders an extra 0.26 euros ($0.36) per share on top of the annual dividend of 0.11 euros for last year. The extra dividend amounts to around 1 billion euros total, and the ordinary dividend will cost another 400 million.
Nokia also said it planned to give at least 0.11 euros as dividend for 2014 and start a 1.25-billion-euro share repurchase programme, and reduce debt by 2 billion.
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