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What's in the Cards for Nokia (NOK) This Earnings Season?

Nokia Corporation NOK is scheduled to report first-quarter 2020 results on Apr 30, before the opening bell. In the last reported quarter, the company delivered a positive earnings surprise of 30.8%.

The Finland-based telecom gear maker’s aggregate revenues are likely to have risen on a year-over-year basis despite the COVID-19 pandemic. This is likely to have been driven by overall industry demand including growth within enterprise vertical.

Let’s discuss the factors that are likely to get reflected in the upcoming quarterly announcement.

Key Developments

At the beginning of the first quarter, Nokia had 63 commercial 5G contracts worldwide. Pakistan Telecommunication Company Limited deployed Nokia’s technology to expand the capacity of a 100G transport network to 200G optical network for domestic and international traffic. The company was selected by Orange France, one of the largest mobile operators in Europe, to evolve its mobile access network toward 5G.

The company launched the Network Operations Master to provide communication service providers (CSPs) with highly-automated and scalable software for managing their 5G networks. Nokia was selected by Orange Slovensko, the leading operator in Slovakia, to prepare its Radio Access Network for 5G. Nokia provided end-to-end 5G portfolio to SoftBank Corp. to become first in the world to have completed tests to demonstrate that non-standalone 5G technology can be used to commercially operate connected cars. These factors are likely to have had a positive impact on the company’s first-quarter performance.

Nokia inked a contract with Telecom Argentina allowing it to offer IoT services to its enterprise customers in the country and across Latin America using Nokia Worldwide IoT Network Grid (WING). It extended its long-standing partnership with mobile operator, IIiad Group, to roll out 5G networks across France and Italy. Nokia and KDDI Corporation, a leading telecom company in Japan, completed a 5G core standalone network trial, moving the operator closer to being able to provide 5G-enabled services. Nokia introduced cloud-native Assurance and Experience software to help CSPs move toward experience-driven and automated 5G network operations.

Nokia and Japan’s mobile network operator Rakuten Mobile collaborated to enable the operator’s implementation of a fully-automated operations environment for the 5G era. Nokia and Lufthansa Technik, the leading provider of technical aircraft services, deployed a 5G industrial-grade private wireless network to accelerate a project that enables remote engine parts inspection for its civil aviation customers. Nokia expanded its fiber access portfolio to include new solutions and innovations that enable service providers to deliver a gigabit experience to everyone. The company’s first-quarter performance is expected to have benefited from these developments.

Nokia, along with leading operators Telenor and Telia, deployed the world’s most advanced shared wireless network that supports a Multi-Operator Core Network feature. The network is designed for wireless technologies spanning from 2G to 5G. Nokia collaborated with Intel on technological advancements for its 5G radio portfolio. The company was selected as a 5G RAN vendor by Chunghwa Telecom, a leading mobile operator in Taiwan.

What do Estimates Indicate?

For the March quarter, the Zacks Consensus Estimate for total revenues is pegged at $5,776 million that indicates a rise of 1.1% from the year-ago quarter’s reported figure. Adjusted earnings per share are pegged at 1 cent, which calls for an improvement from a loss of 2 cents recorded in the prior-year quarter.

What Our Model Says

Our proven model doesn’t predict an earnings beat for Nokia this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Nokia’s Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is -100.00%.

Nokia Corporation Price and EPS Surprise

 

Nokia Corporation Price and EPS Surprise
Nokia Corporation Price and EPS Surprise

Nokia Corporation price-eps-surprise | Nokia Corporation Quote

 

Zacks Rank: Nokia currently has a Zacks Rank #3.

Stocks to Consider

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

Church & Dwight Co., Inc. CHD is slated to release first-quarter 2020 results on Apr 30. It has an Earnings ESP of +3.56% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Southwestern Energy Company SWN is scheduled to release first-quarter 2020 results on Apr 30. The company has an Earnings ESP of +3.90% and carries a Zacks Rank #2.

VICI Properties Inc. VICI has an Earnings ESP of +1.60% and carries a Zacks Rank of 2. The company is set to report first-quarter 2020 results on Apr 30.

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Nokia Corporation (NOK) : Free Stock Analysis Report
 
Southwestern Energy Company (SWN) : Free Stock Analysis Report
 
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