Nokia Corporation NOK is set to release its first-quarter 2024 results on April 24,before the opening bell. In the last reported quarter, the company’s adjusted earnings were 19 cents per share.

The Finland-based telecom equipment provider is expected to witness revenue contraction year over year owing to fierce competition, macroeconomic challenges and inventory corrections. However, efforts to bolster the position in the 5G ecosystem with a strong emphasis on innovation and portfolio expansion are positive. Licensing deals with major e-commerce giants and mobile manufacturers are a tailwind. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

Factors at Play

In the first quarter, Nokia completed the divestiture of its submarine networks business, Alcatel Submarine Networks, to the French State. This non-core asset sale aligns with the company's ongoing strategy to enhance its financial position by focusing on its core Network Infrastructure business, with its future built on three market-leading units: Fixed Networks, IP Networks and Optical Networks. These developments are likely to have had a favorable effect on the company’s first-quarter performance. 

London Internet Exchange, the global Internet Exchange Point, has opted to deploy Nokia’s Deepfield DDoS (Distributed Denial of Service) security solution to protect its network from the growing threat of DDoS attacks. Carrix, one of the world's foremost independent marine terminal and rail yard operators, has partnered with Nokia to introduce Nokia DAC to optimize operations at key marine terminals in the United States.     

During the first quarter, Nokia inked a multi-year patent license agreement with Samsung for an undisclosed amount. It has also signed a patent license agreement with the e-commerce giant Amazon. This agreement offers Amazon access to Nokia's multimedia technologies, which will effectively enhance Amazon’s streaming services and its Prime Video content portfolio. An increasing customer base is likely to have a positive impact on Nokia’s upcoming results.

In the to-be-reported quarter, Nokia unveiled a cutting-edge digital platform, Broadband Easy, which streamlines the process of broadband rollout for operators. The company also launched a new Wi-Fi 7-enabled compact 5G indoor gateway as part of its Fixed Wireless Access portfolio. Dubbed FastMile Gateway 4, this cutting-edge solution is tailored to enable operators to deliver 5G speeds throughout homes, ensuring an enhanced consumer experience. This expansion ensures that operators can provide reliable and fast 5G and Wi-Fi 7 connectivity, addressing the growing demand for high-speed broadband services. These advancements are likely to be reflected in the upcoming results. 

Overall Expectations

The Zacks Consensus Estimate for revenues from the Mobile Networks vertical is pegged at €1.7 billion, suggesting 5.9% year-over-year growth. For the Network Infrastructure segment, our estimate for revenues is pegged at €1.5 billion, implying 5.9% year-over-year growth. Revenues from Cloud & Network Services are estimated to be €781 million, representing 19.8% year-over-year growth.

For the March Quarter, our estimate for the company’s total revenues is pegged at $4.62 billion, indicating a decline from $5.07 billion reported in the prior-year quarter. Adjusted earnings per share is pegged at 6 cents, indicating a decrease from 10 cents reported in the prior-year quarter.

Earnings Whispers

Our proven model does not conclusively 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 chances of an earnings beat. That is not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00%, with both pegged at 5 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
 

Nokia Corporation Price and EPS Surprise

Nokia Corporation price-eps-surprise | Nokia Corporation Quote

Zacks Rank: Nokia has a Zacks Rank #3.

Stocks to Consider

Check Point Software Technologies CHKP is set to release quarterly numbers on April 23. It has an Earnings ESP of +1.71% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Corning Incorporated GLW is set to release quarterly numbers on April 29. It has an Earnings ESP of +2.00% and carries a Zacks Rank #2.

QUALCOMM Incorporated QCOM is set to release quarterly numbers on April 29. It has an Earnings ESP of +3.41% and carries a Zacks Rank #2.

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This article originally published on Zacks Investment Research (zacks.com).

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