This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Buy Nokia Ahead of Earnings

Stocks in this article: NOK AAPL GOOG SI BBRY

NEW YORK ( TheStreet) -- The stock market has a funny way of making you change your mind about a company you once spent so much time criticizing.

Although I haven't been Nokia's (NOK) biggest supporter over the past couple of years, I've been nonetheless impressed at the manner that Nokia's management has altered the company's outlook through a series of recent moves.

Companies don't reach the depths Nokia has suffered without having grossly mismanaged their business. By the same token, I'm willing to now give management credit for (at least) improving Nokia's financial position, while at the same time keeping Nokia's head slightly above water within the flood of smartphone competition against the likes of Apple (AAPL) and Google (GOOG).

I'm not ignoring the reality that this company still has plenty of work to do. Returning value to shareholders is not going to happen overnight. But the company has begun to show some positive signs. And investors are no longer questioning whether Nokia, which was once anointed at the best recovery candidate, can still turn things around. With second-quarter earnings due out Thursday, management must say the right things to ensure investors this former high-flyer is still a good bet.

Without a doubt, profitability will be a heavily discussed topic during the earnings announcement. I'm not going to downplay the importance of the bottom line, but I also understand that Nokia has been working hard over the past couple of quarters looking for ways to reduce expenses. So far this strategy has worked perfectly. This is even though the company received plenty of criticism for cutting costs while the competition spent heavily to grow.

To be completely honest, I was among those who raised eyebrows at this strategy. So now it's only fair to point out that it was management's fiscal awareness (among other things) that allowed Nokia the latitude to buy the remaining 50% stake that it had not already owned in the NSN (Nokia Siemens Network) joint venture with Siemens (SI).

So, with respect to profitability, I don't expect that management will reveal a sudden move in a different direction. As such, I expect the company to meet, if not beat, its earnings targets. I also don't expect that management will have any trouble advancing margins, especially since gross margins improved by almost 4% in the April quarter, which helped Nokia reverse last year's loss into a modest profit.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,778.15 +421.28 2.43%
S&P 500 2,061.23 +48.34 2.40%
NASDAQ 4,748.3960 +104.0840 2.24%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs