On Nov 5, we maintain our Neutral recommendation on
) following mixed third-quarter 2013 financial results. While the
bottom line has surpassed the Zacks Consensus Estimate, the top
line missed the same.
Why the Reiteration?
In the third quarter of 2013, Nokia performed disappointingly in
most categories. Sales in all the three segments of the company
declined year over year followed by falling average selling price
(ASP) of Nokia's smart devices and reduced Mobile Phones sales.
Despite such decline in handset sales, Nokia's Lumia flagship
device business started witnessing rising demand with 40%
year-over-year rise in shipments. Recently, the company launched
Lumia 2520 - a tablet based on Microsoft Corp.'s latest Windows
RT 8.1 platform. Nokia is gearing up for the upcoming holiday
season with the launch of its latest tablet and two new 6 inch
smartphones, Lumia 1320 and 1520.
The company also launched reasonably priced Nokia 207 and 208
phones for Internet savvy customers. The phone has already
received strong responses in China, India and Nigeria. In the
reported quarter, the company achieved operating profitability
for the fifth time consecutively. Furthermore, Nokia decided to
expand its Here Drive+ and Here Transit mapping application to
all smartphones running on Microsoft Corporation's Windows Phone
A huge patent portfolio coupled with the cost cutting measures
implemented by the company will not only drive its margins but
will also boost cash flows in the upcoming quarters.
Currently, Nokia has a Zacks Rank #2 (Buy).
Other Stocks to Consider
Other stocks in this industry that warrant a look include
Novatel Wireless Inc
). Both Qualcomm and Novatel currently carry a Zacks Rank #2
(Buy) while ShoreTel has a Zacks Rank #1 (Strong Buy).
NOKIA CP-ADR A (NOK): Free Stock Analysis
NOVATEL WIRELES (NVTL): Free Stock Analysis
QUALCOMM INC (QCOM): Free Stock Analysis
SHORETEL INC (SHOR): Free Stock Analysis
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