On Aug 14, 2014, we issued an updated research report on
). A significant number of contract wins coupled with aggressive
4GLTE network deployment across China has allowed Nokia to raise
its operating guidance for fiscal 2014.
Nokia has delivered positive earnings surprises in all four
quarters last year, with an average beat of 49.21%. Meanwhile, the
company reported mixed financial results for the second quarter of
fiscal 2014 with the bottom line surpassing the Zacks Consensus
Estimate but the top line missing the same.
Recently, Nokia entered into a patent licensing deal with
Wi-LAN. As per the agreement, the company's Nokia Networks segment
will acquire licenses to a major chunk of Wi-LAN's wireless patent
portfolio covering CDMA, WCDMA, GSM, HSPA and 4G LTE technologies.
Also, Wi-LAN will take possession of a patent portfolio from Nokia.
In an effort to accelerate its network deployment, Nokia has
decided to buy SAC Wireless, a U.S.-based network installation
Moreover, aggressive deployment of 4GLTE network across China
coupled with higher capital expenses related to network
restructuring in India, Korea and Indonesia may create additional
opportunities for the company. The company also received a major 4G
LTE network upgrade contract worth nearly $416 million from EE, a
leading U.K.-based wireless operator. Nokia has also struck a few
major core virtualization deals with large carriers like Korea's SK
Telecom. Further, the company has won a major contract from
VimpelCom Ltd. (
), the third largest telecom operator in Russia.
Separately, Nokia had invested $100 million in the lucrative car
connectivity service. The company also plans to enhance its HERE
division to strengthen its foothold in the telematics service
industry. Also, Nokia teamed up with Continental, an international
automotive supplier, to offer connected car services to vehicle
Meanwhile, Moody's upgraded Nokia's corporate family rating to
Ba2 from B1. In the meantime, Fitch Ratings has also raised Nokia's
debt rating to "BB" from "BB-".
Nokia currently carries a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Other better-ranked stocks worth considering in this sector
include Ericsson (
) and DragonWave Inc. (
), both of which have a Zacks Rank #2 (Buy).
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NOKIA CP-ADR A (NOK): Free Stock Analysis
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