Nokia to give billions back to shareholders as sales dip.

Telecom networks company Nokia saw its shares rise Thursday after it raised its outlook for the year and said it would distribute USD 4.4 billion to shareholders, despite a drop in third quarter earnings.

Revenue in the period was down 2 percent from a year earlier at USD 3.34 billion due to lower demand in North America and Europe. Net profit fell 20 percent to USD 168 million, partly due to shifts in currency values, as well as higher interest and tax expenses.

But operating margins beat market expectations and the company's share price shot up 9 percent to 6.64 euros in early trading in Helsinki.

CEO Rajeev Suri said that although he was not pleased with overall sales, the profitability of the networks sector which accounts for 95 percent of revenue allowed Nokia to raise its full-year forecast. Operating margins are expected near the upper end of 8-11 percent, whereas previously it predicted them around the midpoint of that range.

"Our strong profitability is testament to the strength of our operating model. We said earlier in the year that we would redouble our efforts to ensure our cost structure was aligned to market conditions, and the success of those efforts is very clear in our results," he said.

Sami Sarkamies, senior analyst at Nordea Bank said the result was "excellent, with a positive surprise" from the networks unit.

"Sales were as expected and the margins were clearly higher than expected, allowing the company to improve profitability expectations for the year," Sarkamies said. Lower sales in North America and Europe were partly offset by a 27 percent increase in sales in greater China, both in broadband and global services.

In anticipation of next month's shareholder meeting, which is expected to approve the 15.6 billion euro acquisition of ailing French telecom company Alcatel-Lucent, Nokia said it will pay 4 billion euros to shareholders.

Suri described the acquisition, which will make the Finnish company among the global market leaders in networks, as providing "a very strong long-term value creation opportunity."

Nokia Corp. Has shown signs of improved fortunes since selling off its ailing cellphone unit to Microsoft for 5.4 billion in 2013. In August, it announced the sale of its HERE mapping business valued at some USD 3.1 billion to a consortium of German automakers Audi, BMW and Daimler.

Nokia employed more than 57,000 people in the quarter, up more 8 percent on a year earlier.

No respite for Indian indices.

Ending the day on a negative note, the Indian equity markets lost steam as the day progressed. All major sectoral indices, except consumer durables, closed in the red. PSU and power stocks were the biggest losers. While the BSE-Sensex closed lower by 202 points, the NSE-Nifty closed lower by 60 points. S&P BSE Midcap and the S&P BSE Smallcap also closed on a weak note with both the indices down by 0.4% each.

Asian markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.36% and the Nikkei 225 rose 0.17%. The Hang Seng lost 0.60%. European markets are lower today with shares in London off the most. The FTSE 100 is down 0.98% while France's CAC 40 is off 0.57% and Germany's DAX is lower by 0.01%. The rupee was trading weak at 65.15 against the US$ at the time of writing.

Paint stocks languished in red throughout the trading session with Jenson & Nicholson and Kensai Nerolac bearing majority of the brunt. According to a leading financial daily, Asian Paints' wholly owned subsidiary - Asian Paints (International), Mauritius, has transferred its entire holding of 80% held in the subsidiary company to Samoa Paints, Samoa and 75% holding in the subsidiary company - Asian Paints (S.I.), Solomon Islands, to Berger International, Singapore, a wholly owned subsidiary of Asian Paints (International).

The transfer of stake to Berger International is part of Asian Paints' plans to consolidate its investment in the overseas subsidiaries. Earlier in the year, Asian Paints (International) Limited, Mauritius transferred its entire holding of 49% held in the subsidiary company Asian Paints (Middle East) LLC and 100% of holding in the subsidiary company Asian Paints (Tonga) Limited to Berger International Limited in Singapore.

The script of Asian paints finished on an encouraging note (up 0.3%) on the BSE.

The Indian paint industry has been developing at an optimistic speed since past few years. However, the last few quarters has witnessed quite subdued sales growth owing to sluggish demand. In one of our recent editions of '5 Minute Wrap Up', we outline the performance of three paint companies which dominate the three-fourths of the Indian paint market. the improvement in margins after the decline of crude prices.

According to a leading economic daily, Coal India Ltd (CIL) has entered into a joint venture agreement with GAIL and fertilizer majors Rashtriya Chemical Fertilizers (RCF) and Fertilizer Corporation of India (FCIL) to incorporate a firm for setting up and operating new Ammonia Urea Complex along with power plant and associated facilities at Talcher unit of FCIL in Odisha and to market its products.

Reportedly, The Coal Ministry has agreed to allot a coal block to the proposed JV company on formation of the same and finalization of techno-economic feasibility report.

A consortium of RCF, GAIL, CIL and FCIL had agreed to invest Rs 80 billion for the revival of this urea plant with a production capacity of 1.2 million tonnes per annum.