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Nokia Creates New Division, Announces Management Changes

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Nokia Corporation (NOK - Free Report) recently announced that it is reorganizing its internal structure and strengthening its leadership team in order to capitalize on 5G opportunities. The creation of Access Networks Division by bringing the company’s Mobile Networks and Fixed Networks Business Groups into a single business unit will enable it to simplify its management structure and leverage full portfolio.

The company’s existing Mobile Networks and Fixed Networks Business Groups will form the new Access Networks Division, effective Jan 1, 2019. The heads of Mobile Networks and Fixed Networks Business Groups will report to a new president of Access Networks, who will be appointed later.

Notably, the company has appointed Tommi Uitto as the president of Mobile Networks, replacing Marc Rouanne. However, Nokia is yet to announce the head of Fixed Networks. As a matter of fact, this internal reorganization coupled with management restructuring is likely to boost the company’s position in the 5G network equipment market.

Existing Business Scenario

Nokia has become a leading player in the mobile and fixed network infrastructure with the industry’s most complete, end-to-end portfolio of products, services and licensing. 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-capacityAirScaleproduct, which enables customers to quickly upgrade to 5G, is growing fast.

Moreover, Nokia is continuously expanding its business into targeted, high-growth and high-margin vertical markets to address growth opportunities beyond its traditional primary markets. Rollouts of next-generation 5G networks are anticipated to improve market conditions significantly in 2019 and 2020. In the past year, this Zacks Rank #3 (Hold) company has outperformed the industry it belongs to. The stock has returned 8.9% against the industry’s 1.1% decline.

However, the company’s considerable operations in geographies outside the United States expose it to political and economic disruptions, all of which might directly impact profits.

Key Picks

Some better-ranked stocks from the same space are Comtech Telecommunications Corp. (CMTL - Free Report) , Juniper Networks, Inc. (JNPR - Free Report) and Harris Corporation (HRS - Free Report) . While Comtech Telecommunications sports a Zacks Rank #1 (Strong Buy), Juniper Networks and Harris carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Comtech Telecommunications exceeded estimates in each of preceding four quarters, the average positive earnings surprise being 136.02%.

Juniper Networks surpassed estimates in each of the trailing four quarters, the average positive earnings surprise being 10.99%.

Harris outpaced estimates in each of the preceding four quarters, the average earnings surprise being 7.06%.

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