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Can Higher Revenues Support Nokia's (NOK) Earnings in Q3?
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Nokia Corporation (NOK - Free Report) is scheduled to report third-quarter 2018 results before the opening bell on Oct 25. In the last reported quarter, the company delivered adjusted earnings of 4 cents per share which came in line with the Zacks Consensus Estimate.
The Finnish firm is likely to report higher revenues in the to-be-reported quarter owing to healthy growth dynamics. Whether this can result into an earnings beat remains to be seen.
Let’s find out how things are shaping up prior to the announcement.
Factors to Consider
Nokia is well-positioned for the upcoming technology cycle given the strength of its end-to-end portfolio. The company’s deal win rate is encouraging with notable successes in the key 5G markets of the United States and China. Its installed base of high-capacity AirScale product, which enables customers to quickly upgrade to 5G, is growing fast. Also, its strong end-to-end portfolio remains a differentiator.
During the third quarter, Nokia collaborated with Sudatel — a telecommunications and Internet service provider based in Sudan — to work on the development of ultra-broadband services in the country. This enabled both the companies to conduct trial of Nokia 4.5G Pro, 4.9G and 5G mobile technologies along with Nokia’s fixed fiber-to-the-home portfolio.
Nokia has entered into a deal with Tencent to carry out joint research and development work in 5G to benefit the Internet users of China. The framework aims to pool in resources of both the companies for the overall improvement of the industry. Also, Nokia has inked an agreement with China Mobile to carry out joint research to explore the potential of artificial intelligence and machine learning in 5G networks in China.
During the quarter, the company announced that it secured a €500 million loan from the European Investment Bank to accelerate its R&D efforts on 5G technology. It also announced that its cloud-native core technology has been deployed in Delhi by Idea Cellular, an Indian mobile network operator.
Furthermore, Nokia announced that it has inked a $3.5 billion agreement with T-Mobile to secure complete end-to-end 5G technology, software and services portfolio. It is supplying relevant products and services to help build T-Mobile’s nationwide 5G network with 600 MHz and 28 GHz millimeter wave 5G capabilities compliant with 3GPP 5G New Radio standards.
As part of its cost savings program, Nokia announced that it plans to lay off about 500 employees by the end of 2018 in the Chicago area, which in line with its corporate objective to lower operating costs and improve profitability.
Such strategic collaborations and service enhancements are likely to result in incremental revenues in the near future. For the third quarter, the Zacks Consensus Estimate for total revenues stands at $6,562 million, up from $6,463 million reported in the year-earlier quarter primarily due to improving market conditions, constant currency sales growth and accelerated development of 5G networks.
What Our Model Says
However, our proven model does not conclusively show that Nokia is likely to beat earnings this quarter as it does not possess both the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Earnings ESP: Nokia’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Nokia has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% Earnings ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Franklin Financial Network, Inc. has an Earnings ESP of +2.19% and a Zacks Rank #2.
Mellanox Technologies, Ltd. has an Earnings ESP of +1.04% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Can Higher Revenues Support Nokia's (NOK) Earnings in Q3?
Nokia Corporation (NOK - Free Report) is scheduled to report third-quarter 2018 results before the opening bell on Oct 25. In the last reported quarter, the company delivered adjusted earnings of 4 cents per share which came in line with the Zacks Consensus Estimate.
The Finnish firm is likely to report higher revenues in the to-be-reported quarter owing to healthy growth dynamics. Whether this can result into an earnings beat remains to be seen.
Let’s find out how things are shaping up prior to the announcement.
Factors to Consider
Nokia is well-positioned for the upcoming technology cycle given the strength of its end-to-end portfolio. The company’s deal win rate is encouraging with notable successes in the key 5G markets of the United States and China. Its installed base of high-capacity AirScale product, which enables customers to quickly upgrade to 5G, is growing fast. Also, its strong end-to-end portfolio remains a differentiator.
During the third quarter, Nokia collaborated with Sudatel — a telecommunications and Internet service provider based in Sudan — to work on the development of ultra-broadband services in the country. This enabled both the companies to conduct trial of Nokia 4.5G Pro, 4.9G and 5G mobile technologies along with Nokia’s fixed fiber-to-the-home portfolio.
Nokia has entered into a deal with Tencent to carry out joint research and development work in 5G to benefit the Internet users of China. The framework aims to pool in resources of both the companies for the overall improvement of the industry. Also, Nokia has inked an agreement with China Mobile to carry out joint research to explore the potential of artificial intelligence and machine learning in 5G networks in China.
During the quarter, the company announced that it secured a €500 million loan from the European Investment Bank to accelerate its R&D efforts on 5G technology. It also announced that its cloud-native core technology has been deployed in Delhi by Idea Cellular, an Indian mobile network operator.
Furthermore, Nokia announced that it has inked a $3.5 billion agreement with T-Mobile to secure complete end-to-end 5G technology, software and services portfolio. It is supplying relevant products and services to help build T-Mobile’s nationwide 5G network with 600 MHz and 28 GHz millimeter wave 5G capabilities compliant with 3GPP 5G New Radio standards.
As part of its cost savings program, Nokia announced that it plans to lay off about 500 employees by the end of 2018 in the Chicago area, which in line with its corporate objective to lower operating costs and improve profitability.
Such strategic collaborations and service enhancements are likely to result in incremental revenues in the near future. For the third quarter, the Zacks Consensus Estimate for total revenues stands at $6,562 million, up from $6,463 million reported in the year-earlier quarter primarily due to improving market conditions, constant currency sales growth and accelerated development of 5G networks.
What Our Model Says
However, our proven model does not conclusively show that Nokia is likely to beat earnings this quarter as it does not possess both the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here as you will see below:
Earnings ESP: Nokia’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% as both are pegged at 6 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Nokia Corporation Price and EPS Surprise
Nokia Corporation Price and EPS Surprise | Nokia Corporation Quote
Zacks Rank: Nokia has a Zacks Rank #3, which increases the predictive power of ESP. However, the company’s 0.00% Earnings ESP makes surprise prediction difficult.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Callaway Golf Company has an Earnings ESP of +71.42% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Franklin Financial Network, Inc. has an Earnings ESP of +2.19% and a Zacks Rank #2.
Mellanox Technologies, Ltd. has an Earnings ESP of +1.04% and a Zacks Rank #2.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>