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Market Update

Earnings on Tap: Nokia

Will Nokia keep up the positive momentum, or will its worst fears come true?

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 Nokia Oyj (NOK) will be reporting first-quarter results before the bell Thursday with analysts expecting losses to come in at $0.06 per share as compared with a loss of $0.25 per share reported in the year-ago period.

After a string of quarterly losses, the Finnish manufacturer of mobile phones managed to swing back to a profit in the fourth quarter, on account strong sales of its Lumia smartphones, which hit 4.4 million units worldwide.

Net profit came in at EUR 202 million (around $270 million) during the previous quarter--that's comparable with a loss of EUR 1 billion the company reported in the corresponding period of 2011. Revenues, however, slumped to EUR 8 billion from EUR 10 billion in the year-ago quarter.

Despite the positive news, the company said it expects "competitive industry dynamics" to continue to weigh on its mobile phones and smart-devices business units.

Nokia expects its devices and services division to earn a 2% operating loss in the first quarter, plus or minus 4%, as a result of a seasonal decline in handset demand and an overall shaky macroeconomic environment, explains Morningstar analyst Brian Colello.

After declining nearly 13% on a year-to-date basis, the company's shares are presently trading below Colello's fair value estimate.

Gazala Parveen does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.