We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Motorola vs. Nokia: Which Stock to Bet on Post Q2 Earnings?
Read MoreHide Full Article
With the earnings season drawing to a close, industry peers are doing various analysis and comparisons to gauge the underlying metrics and relative performance. Let us perform a similar comparative analysis between two stocks in the Zacks Wireless Equipment Industry — Motorola Solutions, Inc. (MSI - Free Report) and Nokia Corporation (NOK - Free Report) — to pick the better investment option.
Earnings Scoresheet
Motorola reported strong second-quarter 2018 results on the back of healthy growth across all geographic regions. GAAP earnings for the reported quarter were $180 million or $1.05 per share compared with $131 million or 78 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding non-recurring items, non-GAAP earnings for the reported quarter were $1.46 per share compared with $1.12 in the year-ago quarter. The bottom line exceeded the Zacks Consensus Estimate of $1.37. Net sales came in at $1,760 million compared with $1,497 million in the year-ago quarter, driven by organic growth of 6% and healthy performance across all regions. Quarterly sales exceeded the Zacks Consensus Estimate of $1,709 million.
Nokia reported lackluster financial results for second-quarter 2018 with year-over-year decrease in both top- and bottom-line numbers. Non-IFRS income decreased 68% year over year to €144 million or €0.03 per share ($171.7 million or 4 cents per share) primarily due to sales decline in all three operating segments. The figure came in line with the Zacks Consensus Estimate. Quarterly non-IFRS net sales decreased 6% year over year to €5,318 million ($6,339 million). The top line, however, surpassed the Zacks Consensus Estimate of $6,084 million.
Motorola seems to have an edge over Nokia due to a better earnings surprise percentage.
Price Performance
Over the past year, Motorola has returned 38.8% against a decline of 16.8% for Nokia while the industry rallied 18.5%.
Guidance
Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. With solid quarterly results and continued strength in order trajectory, management has raised the earlier guidance for 2018. Full-year adjusted earnings are currently anticipated to lie within the $6.79-$6.89 per share range, up from $6.70-$6.85 expected earlier on revenue growth of 14.5%, up from prior expectations of 14% rise. Third-quarter 2018 adjusted earnings are expected to be in the $1.67-$1.72 per share range on revenue growth of 13%.
Nokia reiterated its earlier guidance for full-year 2018 and remains on target to deliver €1.2 billion of recurring annual cost savings for the year. The company expects gradual improvement in market conditions in second half of 2018, with particular acceleration in the fourth quarter in North America in its Networks business and accelerated 5G rollout by the year end.
Estimate Revisions
Post earnings release, Motorola’s current-year estimates were raised from $6.83 to $6.85 per share (up 0.3%). Nokia’s current-year estimates have been lowered from 29 cents to 26 cents post earnings release (down 10.3%). With positive estimate revisions, investor sentiments appear to be more bullish on Motorola than Nokia with respect to current-year estimates.
Based on the current scenario, Motorola seems to have trumped Nokia on most fronts and stands out as a better investment option. A couple of better-ranked stocks in the industry are Clearfield, Inc. (CLFD - Free Report) and QUALCOMM Incorporated (QCOM - Free Report) , both carrying a Zacks Rank #2 (Buy).
Clearfield has surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 52.8%.
QUALCOMM has a long-term earnings growth expectation of 10.9%. It topped estimates in each of the trailing four quarters with an average positive earnings surprise of 19.8%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Motorola vs. Nokia: Which Stock to Bet on Post Q2 Earnings?
With the earnings season drawing to a close, industry peers are doing various analysis and comparisons to gauge the underlying metrics and relative performance. Let us perform a similar comparative analysis between two stocks in the Zacks Wireless Equipment Industry — Motorola Solutions, Inc. (MSI - Free Report) and Nokia Corporation (NOK - Free Report) — to pick the better investment option.
Earnings Scoresheet
Motorola reported strong second-quarter 2018 results on the back of healthy growth across all geographic regions. GAAP earnings for the reported quarter were $180 million or $1.05 per share compared with $131 million or 78 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding non-recurring items, non-GAAP earnings for the reported quarter were $1.46 per share compared with $1.12 in the year-ago quarter. The bottom line exceeded the Zacks Consensus Estimate of $1.37. Net sales came in at $1,760 million compared with $1,497 million in the year-ago quarter, driven by organic growth of 6% and healthy performance across all regions. Quarterly sales exceeded the Zacks Consensus Estimate of $1,709 million.
Nokia reported lackluster financial results for second-quarter 2018 with year-over-year decrease in both top- and bottom-line numbers. Non-IFRS income decreased 68% year over year to €144 million or €0.03 per share ($171.7 million or 4 cents per share) primarily due to sales decline in all three operating segments. The figure came in line with the Zacks Consensus Estimate. Quarterly non-IFRS net sales decreased 6% year over year to €5,318 million ($6,339 million). The top line, however, surpassed the Zacks Consensus Estimate of $6,084 million.
Motorola seems to have an edge over Nokia due to a better earnings surprise percentage.
Price Performance
Over the past year, Motorola has returned 38.8% against a decline of 16.8% for Nokia while the industry rallied 18.5%.
Guidance
Motorola is poised to gain from robust organic growth, disciplined capital deployment and a favorable global macroeconomic environment. With solid quarterly results and continued strength in order trajectory, management has raised the earlier guidance for 2018. Full-year adjusted earnings are currently anticipated to lie within the $6.79-$6.89 per share range, up from $6.70-$6.85 expected earlier on revenue growth of 14.5%, up from prior expectations of 14% rise. Third-quarter 2018 adjusted earnings are expected to be in the $1.67-$1.72 per share range on revenue growth of 13%.
Nokia reiterated its earlier guidance for full-year 2018 and remains on target to deliver €1.2 billion of recurring annual cost savings for the year. The company expects gradual improvement in market conditions in second half of 2018, with particular acceleration in the fourth quarter in North America in its Networks business and accelerated 5G rollout by the year end.
Estimate Revisions
Post earnings release, Motorola’s current-year estimates were raised from $6.83 to $6.85 per share (up 0.3%). Nokia’s current-year estimates have been lowered from 29 cents to 26 cents post earnings release (down 10.3%). With positive estimate revisions, investor sentiments appear to be more bullish on Motorola than Nokia with respect to current-year estimates.
Zacks Rank
Both Motorola and Nokia currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
To Sum Up
Based on the current scenario, Motorola seems to have trumped Nokia on most fronts and stands out as a better investment option. A couple of better-ranked stocks in the industry are Clearfield, Inc. (CLFD - Free Report) and QUALCOMM Incorporated (QCOM - Free Report) , both carrying a Zacks Rank #2 (Buy).
Clearfield has surpassed estimates in each of the trailing four quarters with an average positive earnings surprise of 52.8%.
QUALCOMM has a long-term earnings growth expectation of 10.9%. It topped estimates in each of the trailing four quarters with an average positive earnings surprise of 19.8%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>