Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) releases its third quarter results on Oct. 29, and one of the big things analysts are concerned about is still cash burn. Societe Generale analysts note that although results from the company’s handset division are now less important because of the pending sale to Microsoft Corporation (NASDAQ:MSFT), the company will still have to include them in this month’s report.

Nokia

Expectations for Nokia

Analysts Andy Perkins and Peter Knox are assuming that the sale to Microsoft goes through as planned during the first quarter of next year, so they removed it from their future forecasts. In their most recent report, they’re focusing on Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s three remaining businesses. However, the company will not be changing its presentation.

As a result, they’re expecting turnover of €6.1 billion, compared to consensus of €6 billion. They’re expecting an adjusted operating margin of 2.6%, compared to the consensus of 2.1%. The analysts are also expecting a loss of €.01 per share, compared to consensus of a loss of €.02 per share.

Overall, they say the biggest concern for Nokia is cash burn from its handset business. They’re expecting €1.8 billion in net outflow for the third quarter, with most of that coming from the €1.2 billion payment to Siemens for the other half of NSN. They believe cash flow will improve in the fourth quarter, however, and they’re hoping to see a target cash balance in the company’s fourth quarter guidance.

Margin and cash flow are key to Nokia Siemens Network

They say margin performance and cash flow conversion are the two main ingredients for success in Nokia’s infrastructure business. They said the company has recovered well over the last few quarters and guided for a 7% operating margin, although they think this could be low, especially if the company’s presence in Japan and Korea is still strong. For NSN, they have an 8% margin in their model.

Recovery expected in Here maps, but IP business is an unknown

The analysts are expecting to see continued recovery in Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s Here maps business. The company posted 8% external sales growth in the second quarter of the year. They’re also expecting better pre-amortization margins after the 3% the company posted last quarter.

They say Nokia’s Advanced Technologies patent licensing business is the most difficult segment to predict. However, they’re expecting to see that the €.5 billion run rate is maintained.

The analysts continue to rate Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) as a Buy with a €6.20 per share price target. Shares of the company’s stock rose as much as 2 percent at the New York Stock Exchange in morning trading.