) is set to release its fourth-quarter 2012 results before the
opening bell on Wednesday, January 24.
Despite posting a 25% positive surprise in the third quarter,
Nokia failed to improve its top and bottom line results compared
to the last year as its Windows-based smartphone Lumia failed to
generate any meaningful market traction.
Factors to be Considered this Quarter
Things are, however, looking better in the current quarter as
the company expects significant improvement in its Device and
Service segment based on the good show by its flagship Lumia and
low-end smartphone Asha.
The company reported in its preliminary report that it sold
4.4 million Lumia devices against 2.9 million units in the
previous quarter, marking a sequential growth of nearly 52%.
Nokia also sold 9.3 million units of Asha range of handsets in
the fourth quarter, far better than 6.5 million handsets sold in
the previous quarter, thereby posting an impressive sequential
growth of about 43%.
It appears that the company's decision to develop
Windows-based phones has started showing positive signs as the
large screen Lumia 920 with some great imaging and mapping
feature is attracting more customers. Gaining significant market
traction in the emerging market is primarily attributable for the
good results from Asha.
Unlike the third quarter, Nokia's activities in the fourth
quarter were enough to win analysts' confidence. The Zacks
Consensus Estimate for the fourth quarter has improved in the
last seven days from a negative earnings estimate of 1 cent to a
current estimate of break even earnings.
Our proven model does not conclusively show that Nokia
Corporation is likely to beat the Zacks Consensus Estimate in the
fourth quarter. That is because a stock needs to have both a
positive Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2
(Buy) or Zacks Rank #3 (Hold) for this to happen. Unfortunately
this is not the case here as elaborated below.
Break Even Zacks ESP:
This is because the Most Accurate estimate stands at $0.04 while
the Zacks Consensus is lower at $0.00. This leads to a break even
ESP for Nokia.
Zacks Rank #1 (Strong Buy):
Nokia's Zacks Rank of 1, however, increases the predictive power
of ESP. That said we also need to have a positive ESP to be
confident for an earnings surprise call.
Other Stocks to Consider
Here are some other companies you may want to consider as our
model shows they have the right combination of elements to post
an earnings beat this quarter:
) has Earnings ESP of +3.34% and carries a Zacks Rank #3 (Hold).
It is scheduled to report its fourth quarter results on January
Research in Motion Limited (
is scheduled to release its fourth quarter fiscal 2013 results on
March 28. It currently has a break even Earnings ESP and holds a
Zacks Rank #3 (Hold).
MetroPCS Communications Inc
) has an Earnings ESP of positive 23.08% and carries a Zacks Rank
#3 (Hold). It is scheduled to release its fourth quarter results
on January 26.
However, creating a niche for itself amid a crowded smartphone
market remains the biggest challenge for the Finnish handset
APPLE INC (AAPL): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis
METROPCS COMMUN (PCS): Free Stock Analysis
RESEARCH IN MOT (RIMM): Free Stock Analysis
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