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Nokia Beats on Both Top and Bottom Lines

Nokia (NYSE: NOK  ) reported earnings on July 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended June 30 (Q2), Nokia beat expectations on revenues and exceeded expectations on earnings per share.

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

Margins contracted across the board.

Revenue details
Nokia reported revenue of $9.56 billion. The 36 analysts polled by S&P Capital IQ predicted revenue of $9.30 billion on the same basis. GAAP reported sales were 29% lower than the prior-year quarter's $13.47 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.10. The 14 earnings estimates compiled by S&P Capital IQ predicted -$0.12 per share. GAAP EPS were -$0.48 for Q2 against -$0.15 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.6%, 720 basis points worse than the prior-year quarter. Operating margin was -7.4%, 650 basis points worse than the prior-year quarter. Net margin was -18.7%, 1,470 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $8.80 billion. On the bottom line, the average EPS estimate is -$0.11.

Next year's average estimate for revenue is $37.16 billion. The average EPS estimate is -$0.35.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 2,854 members out of 3,189 rating the stock outperform, and 336 members rating it underperform. Among 597 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 527 give Nokia a green thumbs-up, and 70 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 $3.07.

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Seth Jayson owned shares of the following at the time of publication: Nokia. You can view his stock holdings here. He is co-advisor of Motley 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 may not 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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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 20, 2012, at 1:59 PM, gslusher wrote:

    Interesting. Nokia "beats" expectations on July 19 and the stock falls off a cliff the next day. The problem may have been that it went up so much before the earnings release. Marek Fuchs of The Street said to sell Nokia in his "Against the Grain" video blog. Looks like he was correct.

  • Report this Comment On July 23, 2012, at 12:24 PM, melegross wrote:

    What I find amusing is that Nokia is falling off a cliff. It's not falling quite as fast as expected, so people watch, as it's on its way down, and say; Hey, that's not too bad, it's falling more slowly than we expected, so maybe it's all right!

    Well, it's not all right. There is no reason for optimism here. It didn't do as bad as was expected, so the stock goes up? This makes no sense, but I imagine, as the financial community isn't always logical, it does make some sense for those who refuse to take their losses and go. Buying while it goes down still seems to be a good strategy. Good luck with that!

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