Nokia’s share price down, appoints Rajeev Suri as CEO and plans returning 3 billion euros to shareholders

Nokia made an official statement, announcing that Mr. Rajeev Suri will take the position of Chief Executive Officer on May 1st. This appointment is to put an end to a several-month search for a person to take the place of the former CEO Elop, who left the company after the 7.5-billion-dollar acquisition of Nokias handset division by Microsoft Corp.

The newly-appointed Chief Executive Officer, Mr. Rajeev Suri is an electronics and telecommunications engineer, who has been working for Nokia for almost two decades now. He has been leading the mobile network division of the company since 2009. His predecessor Mr. Stephen Elop left the company to return to Microsoft after the handset unit of Nokia was sold.

Nokias Chairman Risto Siilasmaa said in the companys statement, which was cited by Bloomberg: “He has a proven ability to create strategic clarity, drive innovation and growth, ensure disciplined execution, and deliver results. His passion for technology will help ensure that Nokia continues to deliver innovations that have a positive impact on people’s lives.”

Nokia also revealed that is considering a new strategy of development, excluding the phone unit and said that it intends to return 3 billion euros to its shareholders through dividends and share buybacks. As reported by the Wall Street Journal, now when the company has just got rid of its unprofitable phone unit, it said its “financial position and earnings profile have both improved significantly”.

The company shared there was a considerable improvement in its balance sheet, which amounted to 5 billion euros due the 3 billion euros that were returned to Nokias shareholders and the reduction of the companys debt by about 2 billion euros. Now, after finalizing the Microsoft handset deal, the company has three businesses left – the networks unit, the maps unit and the one that is occupied with licensing the companys patents. More than 85% of the companys adjusted fourth-quarter operating profit was generated by the networks business.

As reported by the Financial Times, the newly-appointed Chief Executive Officer Suri shared his vision of the companys development over the years yet to come: “Nokias strategy is to develop its three businesses in order to realise its vision of being a technology leader in a connected world and, in turn, create long-term shareholder value.”

Nokia was 2.19% down to close at 5.14 euros per share yesterday, marking a one-year change of +105.27%. According to the information published on the Financial Times, the 34 analysts offering 12-month price targets for Nokia have a median target of 5.45, with a high estimate of 8.40 and a low estimate of 4.00. The median estimate represents a 3.71% increase from the last price of 5.26.