NEW YORK (TheStreet) -- Nokia (NOK) it has a future in its network equipment and software branches after it sells its phones division to Microsoft (MSFT). Shares jumped 9% to $7.36 Tuesday morning after reporting third-quarter results before the bell.
The Finnish tech company reported a net loss of 91 million Euros, compared to 969 million Euros a year earlier, and revenue dropped 20% year on year to 5.6 billion Euros.
Its devices division -- the unit Microsoft has purchased -- proved to be dead weight, with sales down 19% to 64.6 million units sold, compared to 83 million a year ago. Though sales in its most profitable Nokia Solutions and Networks (NSN) unit fell 33%, management expects to see growth in the segment in the final months of the financial year.
"The third quarter was among the most transformative in our company's history," said CFO Timo Ihamuotila in a statement. "Subject to the completion of the Microsoft transaction, Nokia will have significantly improved earnings profile, strong financial position and a solid foundation from which to invest."
Microsoft shares lost 0.6% to $35.35 as of 11 a.m. EDT.
TheStreet Ratings team rates Nokia Corp as a Hold with a ratings score of C-. The team has this to say about their recommendation:
"We rate Nokia Corp (NOK) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its compelling growth in net income, solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall."