HELSINKI, Oct 29: Nokia predicted a more profitable future for its NSN networks equipment and software unit on Tuesday, raising hopes for growth in what will be the Finnish firm's main business after its former flagship phones division is sold to Microsoft in the new year.

Third-quarter results also showed slow but steady growth in Lumia smartphone sales, although analysts said Microsoft will still face a tough time in pushing its way into the competitive consumer devices market with the Nokia deal, which is due to close some time in the first quarter.

Sales of Lumia smartphones jumped 19 per cent quarter-on-quarter to 8.8 million units, thanks to the launch of more models and what the company said was strong demand particularly for the Lumia 520, while sales of basic phones rose 4pc from the previous quarter to 55.8 million units.

However the phone division's operating margin was a negative 1.6pc in the last quarter.

“I still think it is not obvious they are going to turn that side around,” said Greger Johansson, analyst at research firm Redeye.

Shares in Nokia rose 6pc to the year's high of 5.35 euros after the company forecast NSN's profit margin would improve in the fourth quarter to around 12pc, plus or minus 4 percentage points, from 8.4pc in the third quarter and 9.3pc a year ago, thanks to its cost-cutting programme.—Reuters