Forget The Numbers: Here's Why Nokia Corporation Jumped Today

Nokia posted earnings figures on par with what the market was expecting, but the company just transformed itself in a major way -- for the better.

Apr 29, 2014 at 8:00PM

Although Nokia (NYSE:NOK) did report earnings this morning, they were mostly in line with estimates, and analysts are instead crediting the stock's 5% pop today to news of the company's restructuring. Nokia finally closed the sale of its devices business to Microsoft (NASDAQ:MSFT) last week, and has now announced that the new leaner company will be structured around 3 primary operating segments: Networks, Technologies, and its mapping segment called HERE. The company has also now named the head of its Networks segment, Rajeev Suri, as CEO of the company.

In this segment from Tuesday's Tech Teardown, host Erin Kennedy and Motley Fool tech and telecom bureau chief Evan Niu take a look at the new Nokia without its devices business, and why it is a much more attractive business now that Networks make up the bulk of the company and its revenue. Devices had been bleeding money for a long time now, so the positive effect on cash flow from the divestment plus the huge cash infusion from the sale mean the company will be reinstating its dividend, initiating share buybacks, and paying down debt, all reasons for investors to be pleased today.

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Erin Kennedy has no position in any stocks mentioned. Evan Niu, CFA has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. 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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