Feature Article

April 30, 2014

Comings & Goings: Nokia Turns To Rajeev Suri To Take The Company's CEO Reins

Nokia has come a long way from its status as one of, if not the, biggest names in mobile technology. But despite some setbacks, and some recent gains, the company is not out of the game yet, and it's making it clear that it's eager to fight back in a rapidly expanding and an increasingly competitive market. To that end, it's turned to Rajeev Suri in order to put a fresh life back in a company that's approaching 150 years of total existence.

Suri hit the ground running, delivering an interview in which he noted that Nokia had one major new advantage in its arsenal, particularly the recent major influx of cash represented by the sale of its handset business to Microsoft, a sale that represented around $7.5 billion for the company. The company already has plans for much of that, planning to return just over half of that at $4 billion directly to investors. This is great news for investors, as last year, the company reportedly suspended its dividend in a bid to save cash and refocus the business. The plan includes a share-repurchase plan, a move that's likely to make shares of Nokia improve in value on the strength of sheer scarcity, and not only a dividend for 2013 and 2014, but also a separate one-time dividend of around 26 euro cents (about $0.36 U.S) per share.

But with the rest of that new cash load out, the company is also in a position to look at small business acquisitions in a bid to fill its product portfolio overall. The company's new direction is wireless networks, so those businesses out there with high-quality products in the wireless network sector may be getting some calls from Nokia in the not too distant future.

But Nokia didn't just talk future plans; it also brought out a look at the first-quarter earnings for the company, and made it very clear why Nokia dropped the mobile device market. With handset sales in free-fall, the company yielded a net loss of 239 million Euros (around $331.25 million U.S as of this writing), a loss that is somewhat less than comparable losses last year. It is perhaps the biggest point that shows why Nokia left handsets, without the handset business, the company had at 108 million euro (around $149.69 million U.S.) net profit in the first quarter, which is a major turnaround from the 98 million euro (around $135.71 million U.S) loss of the first quarter of 2013 in non-device operations. Cost-cutting and big software sales in Japan seemed to fuel the gains.

Suri, meanwhile, represents a great opportunity to steer Nokia into a future without handsets. Since Suri has worked for Nokia for the last 20 years, at last report, he's likely got a good idea of both what the company can do and where it can gain some edge. Suri was an electronics and telecom engineer, and reportedly gets much of the credit for the turnaround of Nokia's mobile network operation. We have video on this and several other subjects available at this link.

Naturally, only time will tell if Suri can get change going in the wider Nokia operation, but much of Suri's experience suggests it's likely. Bolstered by a fresh load of cash and likely improved investor sentiment, Suri should have the tools to do the job...but he's going to have to work quickly to make those changes happen.

Edited by Maurice Nagle

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