Nokia has raised its long-term profitability target and expects its new business of concentrating strictly on the telecoms equipment game to grow next year.
The Finnish firm, which has focused on making telco gear and its intellectual property portfolio since ditching its handset unit earlier this year, said that strong demand for faster 4G networks was increasing its profit margin.
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Last month, the firm’s results showed an operating profit margin of 11.4 per cent for the first nine months of the year at its networks unit, after it bagged a contract to supply 4G equipment to China Mobile and helped US network Sprint to build out its 4G network.
The boost gave the firm cause to lift its long term target for operating profit margin to eight to 11 per cent, from a previous goal of five to ten per cent. Nokia told investors about the new target at its first Capital Markets Day in some time that.
"This meeting with investors comes on the heels of a quarter where we demonstrated growth across our three businesses. It showed the potential of this company when it starts to execute well," chief exec Rajeev Suri said.
The company is hoping to grow its networks unit at a slightly faster rate than the market, while its navigation business HERE focuses on automotive and enterprise wins. It’s also hoping to build on its patent licensing next year. ®