Nokia Corporation (ADR) (NYSE:NOK) earnings results were much better than Wall Street expected in terms of earnings before interest and taxes, margins, and cash preservation. As a result, shares rose 2% in early afternoon trading at the New York Stock Exchange and JPMorgan Cazenove analysts say there was “no food for bears” in those results.
Nokia’s results were strong
Analysts Sandeep Deshpande and Rod Hall, along with their teams, do not have a rating on Nokia. However, they’re positive on the company’s most recent results. Revenue was lower than expected, but the company did beat on EBIT meaningfully. Third quarter group revenue was €5.7 billion. Sales were not as good as expected in NSN or HERE, although Devices and Services sales were better than expected.
Nokia Corporation (NYSE:NOK)’s net cash did fall because of its acquisition of Siemens’ stake in NSN. However, other than that payment, it was flat quarter over quarter, putting a rest to cash burn worries for now.
The company also reported improvements in Devices and Services, specifically the sale of a record 8.8 million Lumia handsets, which was ahead of consensus. Smartphone average selling price was €142.5, just below consensus estimates. Nokia also beat expectations for mobile phone units and average selling prices. For mobile phones, average selling price was €26.7, while units were 55.8 million during the quarter. Margins for the division were also better than expected. Total sales for Devices and Services was €2.9 billion. Gross margins were 23.2%.
Nokia Solutions Networks drives results
Of course NSN and Here maps continue to drive Nokia Corporation (NYSE:NOK) results, which is a good thing because those are the two main parts which will be left after the company sells its Devices and Services division. NSN sales did decline a bit to €2.6 billion because of seasonality.
Fourth quarter margin guidance also beat expectations as the company guided for solid sequential sales growth in the December quarter with an NSN margin of between 12% and -4%.