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Can Nokia's (NOK) Earnings Pull a Surprise this Season? - Analyst Blog

Nokia CorporationNOK is set to release second-quarter 2015 results before the opening bell on Jul 30.

In the last quarter, the company's earnings were in line with the Zacks Consensus Estimate. Let's see how things are shaping up for this announcement.

Factors at Play

In order to remain competitive in the telecom infrastructure market, Nokia continues to invest heavily in research and development. Such investments will not only hurt the company's margins but will also impact its cash flow. Moreover, Nokia will be acquiring Alcatel-Lucent for Euro 15.6 billion (approximately $16.6 billion) which we believe will dent its cash position and also increase its debt burden. In addition, integration risks are also involved in the transaction.

Earnings Whispers

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 Earnings ESP and a Zacks Rank #1 (Strong Buy), #2 (Buy) or at least #3 (Hold) for this to happen. Unfortunately, this is not the case here as elaborated below.

Zacks ESP: The Most Accurate estimate and the Zacks Consensus Estimate are poised at 5 cents. Hence, the ESP is 0.00%.

Zacks Rank: Nokia carries a Zacks Rank #4 (Sell).

Please note that Sell-rated stocks (#4 and 5) should never be considered going into an earnings announcement.

Stocks to Consider

Here are some companies you may want to consider as our model shows these have the right combination of elements to post an earnings beat this quarter.

T-Mobile US, Inc. TMUS has an Earnings ESP of +11.77% and a Zacks Rank #3.

Facebook, Inc. FB has an Earnings ESP of +6.45% and a Zacks Rank #3.

The Walt Disney Company DIS has an Earnings ESP of +2.16% and a Zacks Rank #3.

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NOKIA CP-ADR A (NOK): Free Stock Analysis Report

DISNEY WALT (DIS): Free Stock Analysis Report

FACEBOOK INC-A (FB): Free Stock Analysis Report

T-MOBILE US INC (TMUS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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