What happened

Shares of Nokia (NOK -1.13%) fell hard on Thursday morning, triggered by a mixed earnings report. As of 11:40 a.m. EDT, the Finnish telecom-infrastructure specialist's stock had taken a 19.5% haircut.

So what

Nokia's adjusted third-quarter earnings landed at $0.11 per share and per American depositary receipt, up from $0.05 per share in the year-ago period and comfortably ahead of the Street's consensus estimate of $0.07 per share. But sales fell 7% year over year, stopping at $6.46 billion and falling short of analysts' $6.6 billion target.

Looking ahead, Nokia's management team contemplated a difficult global market for telecom-network upgrades and installations, resulting in a downbeat financial forecast. Among other issues, Nokia now expects its 2017 expenses related to the acquisition of Alcatel-Lucent to be about $2.2 billion, a 12% increase over the previous guidance. Adding salt to the wound, Nokia's management also expects these soft market conditions to continue through the first half of 2018.

Bird's-eye view of a lightly crowded city street, overlaid with a transparent Nokia logo.

Image source: Nokia.

Now what

The Alcatel-Lucent deal is still expected to unlock $1.4 billion of annual cost savings, starting in 2018. As for the global networking market, the upcoming wave of 5G wireless-network upgrades should give Nokia and its sector peers plenty of fuel for their growth fires in late 2018 and beyond. But Mr. Market is ignoring these long-term business prospects today, choosing to focus on the short-term downsides of Nokia's report instead.

This is a classic cyclical business, caught in the doldrums before the next upturn. Trading at just 13 times trailing earnings today, Nokia's stock is starting to look like a good deal for opportunistic investors.