Nokia's Curious Quarter


The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics relating to their 10-Bagger portfolio.

Nokia reported results for its second quarter, and they didn't look great at first glance. Sales contracted 19% year over year, and the operating loss widened significantly. On a positive note, the company did say that it sold 4 million phones in its Lumia product line, which was higher than expected. That's a surprise, considering those phones are not compatible with the Microsoft Windows 8 release coming up. But overall smart-device sales fell 39% year over year. Like Research In Motion, Nokia is losing share to Apple and to phones using Google's Android system. The stock rose sharply after the earnings announcement. But if we look at the overall trend, it remains poor. And what's going to happen when the iPhone5 comes out, and Google's Jelly Bean upgrade gets going? We prefer owning leaders like Apple and Google than value traps like Nokia.

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John Reeves owns shares of Apple and Google. David Meier owns shares of Apple. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, Microsoft, and Nokia. 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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