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

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.

The biggest thing to come out of Silicon Valley in years
If you thought the iPod, the iPhone, and the iPad were amazing, just wait until you see this. One hundred of Apple's top engineers are busy building one in a secret lab. And an ABI Research report predicts 485 million of them could be sold over the next decade. But you can invest in it right now... for just a fraction of the price of AAPL stock. Click here to get the full story in this eye-opening new report.


Read/Post Comments (4) | Recommend This Article (2)

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 April 29, 2014, at 8:23 PM, lee654 wrote:

    Agree, 2014 will be a good year for Nokia !

  • Report this Comment On April 29, 2014, at 8:24 PM, wwu12345 wrote:

    Operating margin is not about 40%. It is about 10%.

  • Report this Comment On April 29, 2014, at 8:25 PM, wwu12345 wrote:

    10% operating margin is not bad. It is about double the operating margin of ERIC.

  • Report this Comment On April 30, 2014, at 9:46 AM, TMFNewCow wrote:

    @wwu12345,

    Whoops, you are absolutely correct on the Network segment's non-IFRS operating margin. I was accidentally looking at non-IFRS gross margin.

    -- Evan

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2936096, ~/Articles/ArticleHandler.aspx, 10/31/2014 12:32:03 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement