Nokia Beats on EPS, but GAAP Results Lag

Seth Jayson, The Motley Fool
Updated

Nokia (NYS: NOK) reported earnings on Jan. 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Nokia met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue shrank significantly, and GAAP earnings per share dropped to a loss.

Margins dropped across the board.

Revenue details
Nokia logged revenue of $13.00 billion. The 41 analysts polled by S&P Capital IQ hoped for revenue of $13.05 billion. Sales were 23% lower than the prior-year quarter's $16.97 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.08. The 15 earnings estimates compiled by S&P Capital IQ forecast $0.06 per share on the same basis. GAAP EPS were -$0.03 for Q4 compared to $0.27 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 29.0%, 180 basis points worse than the prior-year quarter. Operating margin was 2.5%, 710 basis points worse than the prior-year quarter. Net margin was -10.7%, 1,660 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $10.93 billion. On the bottom line, the average EPS estimate is -$0.02.

Next year's average estimate for revenue is $48.58 billion. The average EPS estimate is $0.15.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,668 members out of 2,948 rating the stock outperform, and 282 members rating it underperform. Among 648 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 601 give Nokia a green thumbs-up, and 47 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Nokia is hold, with an average price target of $7.62.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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