Networking giant Nokia Corporation (NOK Quick QuoteNOK - Free Report) is scheduled to report second-quarter 2016 results on Aug 4.

This key player in the field of telecommunications has an impressive history with respect to earnings, having outshined the Zacks Consensus Estimate in three of the last four quarters. The average earnings beat is 30.21%.

Factors at Play

Nokia’s quarterly performance is expected to benefit from its acquisition of Withings S.A. and synergies from its Alcatel-Lucent takeover. The company’s rapid deployment of 4G LTE network across China and the rest of the world along with increasing popularity of Voice over LTE (VoLTE) and the Voice over Wi-Fi services are expected to boost top-line growth. Moreover, the company’s decision to expand its licensing agreement with Samsung is encouraging.

However, the company is facing challenges in its primary Network segment along with stiff competition from peers such as Cisco Systems, Inc. (CSCO Quick QuoteCSCO - Free Report) and Motorola Solutions Inc. (MSI Quick QuoteMSI - Free Report) . Additionally, its global operations expose the company to adverse foreign exchange movements which could affect the bottom line.

NOKIA CP-ADR A Price and EPS Surprise

NOKIA CP-ADR A Price and EPS Surprise | NOKIA CP-ADR A Quote

Earnings Whispers

Our proven model does not conclusively show that Nokia is likely to beat the Zacks Consensus Estimate this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Earnings ESP for Nokia is 0.00%, as the Most Accurate estimate and the Zacks Consensus Estimate are both pegged at 4 cents.

Zacks Rank: Nokia carries a Zacks Rank #3 (Hold) which increases the predictive power of ESP. However, the company’s 0.00% ESP complicates our surprise prediction.

Note that, we caution against Sell-rated (#4 and 5) stocks going into an earnings announcement, especially if the company has been seeing negative estimate revisions.

Stock to Consider

Here is a company you may want to consider as our model shows it has the right combination of elements to post an earnings beat this quarter.

Analog Devices, Inc. (ADI Quick QuoteADI - Free Report) has an earnings ESP of +2.63% and a Zacks Rank #2.

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