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Nokia (NOK) to Miss Fiscal 2023 Target on License Renewal Delay
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Nokia Corporation (NOK - Free Report) declared that it is likely to fall short of its 2023 financial target. The ongoing license renewal negotiations in Nokia Technologies are unlikely to conclude within the current fiscal year. Despite the fierce discussions among involved parties and favorable court outcomes, the Finnish telecom entity is placing a strong emphasis on safeguarding its patent portfolio over rushing to match a specific timeline for resolution.
Owing to these reasons, the company will not be able to incorporate the revenues generated from license renewals into its fiscal 2023 financial performance. This indicates that net sales, operating margin and free cash flow targets for the current fiscal year are likely to remain unfulfilled. However, Nokia reasserted that its strategic direction remains consistent and will adhere to the planning outlined in December across all business segments.
Nokia also faced headwinds owing to customers’ constrained spending behavior during the fourth quarter. Nevertheless, the company is witnessing an uptick in order rates and expects a sequential improvement in revenues from Nokia networks businesses encompassing Mobile Networks, Cloud Network and Services and Network infrastructure.
The company expects the resolution to be concluded in 2024, which will boost its fiscal 2024 top line, including associated catch-up payments. Management remains optimistic that the profitability of its network businesses will continue to align with the long-term comparable operating margin expectations communicated in December 2023.
Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. Its installed base of high-capacity AirScale products, which enables customers to upgrade to 5G quickly, is growing fast. It is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, it is transforming the way people and things communicate and connect.
NOK aims to create new business and licensing opportunities in the consumer ecosystem. It facilitates customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation required to support dynamic operations, reduce complexity and improve efficiency. It seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
The stock has declined 27% in the past year against the industry’s growth of 14.2%.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1 at present, is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services and a high-quality network to increase the competitiveness of local businesses and improve the efficiency of government operations.
U.S. Cellular has undertaken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology. The company is well-positioned for continued demand for broadband.
Workday Inc. (WDAY - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 13.24%. In the last reported quarter, it delivered an earnings surprise of 9.29%.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.
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Nokia (NOK) to Miss Fiscal 2023 Target on License Renewal Delay
Nokia Corporation (NOK - Free Report) declared that it is likely to fall short of its 2023 financial target. The ongoing license renewal negotiations in Nokia Technologies are unlikely to conclude within the current fiscal year. Despite the fierce discussions among involved parties and favorable court outcomes, the Finnish telecom entity is placing a strong emphasis on safeguarding its patent portfolio over rushing to match a specific timeline for resolution.
Owing to these reasons, the company will not be able to incorporate the revenues generated from license renewals into its fiscal 2023 financial performance. This indicates that net sales, operating margin and free cash flow targets for the current fiscal year are likely to remain unfulfilled. However, Nokia reasserted that its strategic direction remains consistent and will adhere to the planning outlined in December across all business segments.
Nokia also faced headwinds owing to customers’ constrained spending behavior during the fourth quarter. Nevertheless, the company is witnessing an uptick in order rates and expects a sequential improvement in revenues from Nokia networks businesses encompassing Mobile Networks, Cloud Network and Services and Network infrastructure.
The company expects the resolution to be concluded in 2024, which will boost its fiscal 2024 top line, including associated catch-up payments. Management remains optimistic that the profitability of its network businesses will continue to align with the long-term comparable operating margin expectations communicated in December 2023.
Nokia is well-positioned for the ongoing technology cycle, given the strength of its end-to-end portfolio. Its installed base of high-capacity AirScale products, which enables customers to upgrade to 5G quickly, is growing fast. It is driving the transition of global enterprises into smart virtual networks by creating a single network for all services, converging mobile and fixed broadband, IP routing and optical networks with the software and services to manage them. Leveraging state-of-the-art technology, it is transforming the way people and things communicate and connect.
NOK aims to create new business and licensing opportunities in the consumer ecosystem. It facilitates customers to move away from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and flexible automation required to support dynamic operations, reduce complexity and improve efficiency. It seeks to expand its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets.
The stock has declined 27% in the past year against the industry’s growth of 14.2%.
Image Source: Zacks Investment Research
Nokia currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
NVIDIA Corporation (NVDA - Free Report) , currently carrying a Zacks Rank #2 (Buy), delivered a trailing four-quarter average earnings surprise of 18.99%. In the last reported quarter, it delivered an earnings surprise of 19.64%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphic processing unit. Over the years, the company’s focus evolved from PC graphics to AI-based solutions that support high-performance computing, gaming and virtual reality platforms.
United States Cellular Corporation (USM - Free Report) , sporting a Zacks Rank #1 at present, is the fourth largest full-service wireless carrier in the United States. The company provides a range of wireless products and services and a high-quality network to increase the competitiveness of local businesses and improve the efficiency of government operations.
U.S. Cellular has undertaken concrete steps to accelerate subscriber additions and improve churn management. The company aims to offer the best wireless experience to customers by providing superior quality network and national coverage. It is well-positioned to support the investment required for network enhancements, including the deployment of 5G technology. The company is well-positioned for continued demand for broadband.
Workday Inc. (WDAY - Free Report) , carrying a Zacks Rank #2 at present, delivered a trailing four-quarter average earnings surprise of 13.24%. In the last reported quarter, it delivered an earnings surprise of 9.29%.
Workday is a provider of enterprise-level software solutions for financial management and human resource domains. The company’s cloud-based platform combines finance and HR in a single system that makes it easier for organizations to provide analytical insights and decision support.