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Will Higher Revenues Augment Nokia's (NOK) Q2 Earnings?
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Nokia Corporation (NOK - Free Report) is scheduled to report second-quarter 2021 results, before the opening bell, on Jul 29. In the last reported quarter, adjusted earnings surpassed the Zacks Consensus Estimate by 7 cents. The company delivered an earnings surprise of 700% in the previous quarter, thereby pulling off a trailing four-quarter earnings surprise of 215.2%, on average.
The Finland-based telco equipment vendor is expected to have recorded higher revenues on a year-over-year basis on the back of robust 5G growth supported by favorable product and regional mix across the Mobile Networks and Network Infrastructure segments. With businesses gradually picking up pace post the COVID-19 mayhem, the tech giant’s margins might have elevated on account of cost-reduction initiatives and strong cash generation.
With a progressive business model, Nokia’s sales growth is also likely to have been driven by higher 5G ReefShark shipments. Accelerated product roadmaps and sharpened customer focus coupled with private wireless strength might have acted as significant tailwinds. Increased investments in 5G R&D, fueled by healthy demand for 5G telecommunications equipment for higher deployments, are expected to have driven its momentum across the globe. Backed by a solid liquidity position and thriving partner ecosystem, the company is on track with its three-phased plan to achieve sustainable, profitable growth and technology leadership.
Factors at Play
During the quarter under review, Nokia partnered with Intel Corporation (INTC - Free Report) to incorporate the latter’s 3rd Generation Xeon Scalable Processors in its AirFrame data center solutions. The combination will not only drive Nokia AirFrame’s compute capacity but also enable superior data throughput with reduced energy consumption. It concluded a multi-year, multi-technology patent cross-license agreement with Lenovo.
China Mobile Cloud deployed Nuage Networks’ Software-Defined Networking (SDN) solution for the nationwide set up of its public cloud service. Nokia’s Nuage Networks provides SDN solutions that enable managed service providers and cloud providers to deliver public cloud services to enterprise customers. It teamed up with LG Corporation’s subsidiary, LG Uplus, to deploy small cell AirScale Indoor Radio systems across a number of indoor sites. Supported by Nokia’s AirScale portfolio, the installation will help in expanding 5G coverage in South Korea.
It secured a 10-year managed services contract with ProRail to support its GSM-Railway voice and data communications network in the Netherlands. The company achieved a historic 100-customer milestone for the indigenously built Quillion chipset-based broadband solutions. Further, Nokia inked a five-year agreement with Net4Mobility to deploy its commercial 5G network across key regions of Sweden. It collaborated with Microsoft to announce the world’s first deployment of multiple artificial intelligence (AI) use cases over public cloud. T-Mobile Netherlands selected Nokia as its partner to secure its fixed and mobile networks against cyber-attacks with a wide range of managed services for five years.
During the quarter-to-be-reported, the company signed a patent licensing agreement with automotive manufacturer — Daimler. Nokia unveiled its avant-garde cloud-native NetGuard XDR Security Operations platform, and Managed Detection and Response services to enhance revenues for communication service providers while reinforcing 5G networks’ security. It also joined forces with Qualcomm and U.S. Cellular to successfully conduct a field trial of 5G mmWave solution in a commercial network. The milestone trial achieved an extended range of more than 10 km over mmWave with average download speed of about 1 Gbps and uplink speed of approximately 57 Mbps for an expanded 5G coverage across rural areas with improved connectivity and low latency features.
In addition, the company partnered with the U.S. tech behemoth, AT&T, to conduct the first call on the latter’s network using the C-Band spectrum. The call was made using a 5G smartphone form factor device powered by the Qualcomm Snapdragon X55 5G Modem-RF System coupled with Nokia’s AirScale baseband and 5G massive MIMO (mMIMO) 64T64R C-Band radio. It will support AT&T in extending its 5G services across the United States. The company aims to cover 200 million people with C-Band by the end of 2023.
Nokia opened its first Open Radio Access Network Collaboration and Testing Center at its office in Dallas, TX. It also launched a slew of AI and machine learning-driven support solutions, namely — Nokia Digital Assistant, Nokia Learn and an AI based work-flow optimization service. With more than 230 commercial 5G agreements, Nokia currently has 67 live 5G networks, thereby marking a significant feat in the highly competitive market.
Major deals with a comprehensive list of leading entities like Amazon Web Services, Mobily, National Cable Television Cooperative, KATCH Network, Chunghwa Telecom, Etisalat, Telefonica Spain, Movistar Chile, PLDT, DITO, Allo, Optus, NetNordic, Vodafone, SaskTel, Orange, DISH and Uninett are likely to have positioned Nokia for the ongoing technology cycle, given the strength of its end-to-end portfolio. These developments are likely to have had a positive impact on the company’s top-line performance in the second quarter.
The Zacks Consensus Estimate for total revenues of the company stands at $6,407 million, indicating a 14.3% increase from $5,606 million reported in the prior-year quarter. The consensus mark for adjusted earnings per share is pegged at 6 cents. It had reported 7 cents in the year-earlier quarter.
Earnings Whispers
Our proven model predicts an earnings beat for Nokia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +9.09%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
BJ's Restaurants, Inc. (BJRI - Free Report) is scheduled to release second-quarter 2021 results on Jul 29. The company has an Earnings ESP of +16.33% and carries a Zacks Rank #2, at present.
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Will Higher Revenues Augment Nokia's (NOK) Q2 Earnings?
Nokia Corporation (NOK - Free Report) is scheduled to report second-quarter 2021 results, before the opening bell, on Jul 29. In the last reported quarter, adjusted earnings surpassed the Zacks Consensus Estimate by 7 cents. The company delivered an earnings surprise of 700% in the previous quarter, thereby pulling off a trailing four-quarter earnings surprise of 215.2%, on average.
The Finland-based telco equipment vendor is expected to have recorded higher revenues on a year-over-year basis on the back of robust 5G growth supported by favorable product and regional mix across the Mobile Networks and Network Infrastructure segments. With businesses gradually picking up pace post the COVID-19 mayhem, the tech giant’s margins might have elevated on account of cost-reduction initiatives and strong cash generation.
With a progressive business model, Nokia’s sales growth is also likely to have been driven by higher 5G ReefShark shipments. Accelerated product roadmaps and sharpened customer focus coupled with private wireless strength might have acted as significant tailwinds. Increased investments in 5G R&D, fueled by healthy demand for 5G telecommunications equipment for higher deployments, are expected to have driven its momentum across the globe. Backed by a solid liquidity position and thriving partner ecosystem, the company is on track with its three-phased plan to achieve sustainable, profitable growth and technology leadership.
Factors at Play
During the quarter under review, Nokia partnered with Intel Corporation (INTC - Free Report) to incorporate the latter’s 3rd Generation Xeon Scalable Processors in its AirFrame data center solutions. The combination will not only drive Nokia AirFrame’s compute capacity but also enable superior data throughput with reduced energy consumption. It concluded a multi-year, multi-technology patent cross-license agreement with Lenovo.
China Mobile Cloud deployed Nuage Networks’ Software-Defined Networking (SDN) solution for the nationwide set up of its public cloud service. Nokia’s Nuage Networks provides SDN solutions that enable managed service providers and cloud providers to deliver public cloud services to enterprise customers. It teamed up with LG Corporation’s subsidiary, LG Uplus, to deploy small cell AirScale Indoor Radio systems across a number of indoor sites. Supported by Nokia’s AirScale portfolio, the installation will help in expanding 5G coverage in South Korea.
It secured a 10-year managed services contract with ProRail to support its GSM-Railway voice and data communications network in the Netherlands. The company achieved a historic 100-customer milestone for the indigenously built Quillion chipset-based broadband solutions. Further, Nokia inked a five-year agreement with Net4Mobility to deploy its commercial 5G network across key regions of Sweden. It collaborated with Microsoft to announce the world’s first deployment of multiple artificial intelligence (AI) use cases over public cloud. T-Mobile Netherlands selected Nokia as its partner to secure its fixed and mobile networks against cyber-attacks with a wide range of managed services for five years.
During the quarter-to-be-reported, the company signed a patent licensing agreement with automotive manufacturer — Daimler. Nokia unveiled its avant-garde cloud-native NetGuard XDR Security Operations platform, and Managed Detection and Response services to enhance revenues for communication service providers while reinforcing 5G networks’ security. It also joined forces with Qualcomm and U.S. Cellular to successfully conduct a field trial of 5G mmWave solution in a commercial network. The milestone trial achieved an extended range of more than 10 km over mmWave with average download speed of about 1 Gbps and uplink speed of approximately 57 Mbps for an expanded 5G coverage across rural areas with improved connectivity and low latency features.
In addition, the company partnered with the U.S. tech behemoth, AT&T, to conduct the first call on the latter’s network using the C-Band spectrum. The call was made using a 5G smartphone form factor device powered by the Qualcomm Snapdragon X55 5G Modem-RF System coupled with Nokia’s AirScale baseband and 5G massive MIMO (mMIMO) 64T64R C-Band radio. It will support AT&T in extending its 5G services across the United States. The company aims to cover 200 million people with C-Band by the end of 2023.
Nokia opened its first Open Radio Access Network Collaboration and Testing Center at its office in Dallas, TX. It also launched a slew of AI and machine learning-driven support solutions, namely — Nokia Digital Assistant, Nokia Learn and an AI based work-flow optimization service. With more than 230 commercial 5G agreements, Nokia currently has 67 live 5G networks, thereby marking a significant feat in the highly competitive market.
Major deals with a comprehensive list of leading entities like Amazon Web Services, Mobily, National Cable Television Cooperative, KATCH Network, Chunghwa Telecom, Etisalat, Telefonica Spain, Movistar Chile, PLDT, DITO, Allo, Optus, NetNordic, Vodafone, SaskTel, Orange, DISH and Uninett are likely to have positioned Nokia for the ongoing technology cycle, given the strength of its end-to-end portfolio. These developments are likely to have had a positive impact on the company’s top-line performance in the second quarter.
The Zacks Consensus Estimate for total revenues of the company stands at $6,407 million, indicating a 14.3% increase from $5,606 million reported in the prior-year quarter. The consensus mark for adjusted earnings per share is pegged at 6 cents. It had reported 7 cents in the year-earlier quarter.
Earnings Whispers
Our proven model predicts an earnings beat for Nokia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is perfectly the case here.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +9.09%. 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-eps-surprise | Nokia Corporation Quote
Zacks Rank: Nokia currently has a Zacks Rank #3.
Other Stocks to Consider
Here are some other companies you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this season:
Group 1 Automotive, Inc. (GPI - Free Report) is slated to release second-quarter 2021 results on Jul 29. It has an Earnings ESP of +31.30% and currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
BJ's Restaurants, Inc. (BJRI - Free Report) is scheduled to release second-quarter 2021 results on Jul 29. The company has an Earnings ESP of +16.33% and carries a Zacks Rank #2, at present.