) is set to release its first-quarter 2014 financial numbers
before the opening bell on April 29, 2014.
In the prior quarter, the company's earnings surpassed the
Zacks Consensus Estimate by a margin of 83.33%. Let's see
how things are shaping up for this announcement.
Factors to Influence This Quarter
Nokia has received all the regulatory approvals to sell its
handset business to
). The deal is expected to close on April 25, 2014. Post the
divestiture, Nokia wholly-owned subsidiary, Nokia Solutions and
Networks ("NSN") will become the company's chief business
division with approximately 90% of the total revenue.
Recently, NSN has cut a deal with one of Israel's leading
telecom operators, Cellcom. A few months back, VimpelCom Ltd.,
the third largest telecom operator in Russia, selected NSN to
provide equipment and services for its 4G LTE (Long-Term
Evolution) network deployment plans.
NSN has also received a major 4G LTE network upgrade contract
of nearly $416 million from EE, a leading U.K.-based wireless
operator. Hence, continuous contract wins, aggressive deployment
of 4GLTE network across China coupled with higher capital
expenses related to network restructuring in emerging nations may
bolster top-line growth for Nokia in the upcoming quarters.
On the flip side, Nokia has lowered NSN's adjusted operating
margin guidance for the first quarter of 2014. It expects margins
in the range of 5% plus -- minus 4%. Moreover, the company's
decision to spend nearly $270 million in 2014 might dent its cash
position. Also, the NSN segment is facing severe competition from
Ericsson and Huawei.
Our proven model does not conclusively show that Nokia is
likely to beat the Zacks Consensus Estimate this quarter. This is
because a stock needs to have both a positive
and a Zacks Rank #1, 2 or 3 for this to happen. Unfortunately,
this is not the case here as elaborated below.
The Most Accurate estimate and the Zacks Consensus Estimate are
poised at $0.04. Hence, the ESP is 0.00%.
Nokia's Zacks Rank #1 (Strong Buy) which when combined with a
0.00% ESP makes surprise prediction difficult.
The Sell-rated stocks (#4 and 5) should never be considered
going into an earnings announcement.
We caution investors against the stock going into the earnings
announcement, as a Zacks Earnings ESP of 0.00% combined with a
Zacks Rank #1 lowers the possibility of an earnings surprise.
Other Stocks to Consider
Here are some other companies to consider as our model shows
these have the right combination of elements to post an earnings
beat this quarter.
America Movil S.A.B. de C.V.
) with Earnings ESP of +9.76% and Zacks Rank #3 (Hold).
) with Earnings ESP of +11.11% and Zacks Rank #3.
) with Earnings ESP of +0.59% and Zacks Rank #3.
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