All last year, as the global recession brewed, Nokia (NYSE: NOK) bucked the trend and defied the skeptics, beating every earnings estimate Wall Street could throw at it. Will the Finnish phenomenon be able to keep outperforming in the new year? We'll get our first clue on Thursday, when Nokia reports its Q1 2008 earnings. Here's what to expect.

What analysts say:

  • Buy, sell, or waffle? 50 analysts track Nokia. 5-0 -- that's more than I've seen following any other company, ever. More than fellow competitors Ericsson (Nasdaq: ERIC) and Alcatel-Lucent (NYSE: ALU) attract. What's more, most of these guys love the stock. Nokia gets 35 buy ratings, seven holds, and eight sells.
  • Revenue. But little wonder. On average, the analysts are looking for an astounding 55% increase in sales, to around $20 billion.
  • Earnings. Profits are predicted to rise 68% to $0.57 per ADR.

What management says:
In fellow Fool Anders Bylund's view, the biggest news at Nokia this quarter was the company's announcement of the "E90 Communicator," a mobile communications device targeted at the business user (which we can divine from the fact that it will "connect to corporate databases through the Oracle (Nasdaq: ORCL) Database Lite framework." According to Anders, the device is aimed squarely at Research In Motion (Nasdaq: RIMM), and at stealing BlackBerry sales from RIM's corporate fan club.

What management does:
Correct me if I'm wrong -- but weren't the skeptics saying just a few years ago that cell phones are destined to become a "commodity?" Devices like the E90 sure don't sound commoditized to me. Plus, if the theory held water, we should see cell-phone makers' margins collapse as one device becomes relatively indistinguishable from the next.

While that thesis seems to be holding more or less true for Motorola (NYSE: MOT) and Ericsson, both of whom have seen their gross margins compressed in recent quarters, it couldn't be farther from the truth for Nokia. The telecom giant has grown its rolling gross in each of the last two quarters, and while its operating margin looks a little wobbly, the net is doing just fine.

Margins

9/06

12/06

3/07

6/07

9/07

12/07

Gross

33%

32.5%

32.4%

31.9%

32.7%

34.5%

Operating

13.2%

13%

12.7%

13.9%

14.7%

13.9%

Net

10.3%

10.5%

10.2%

13.4%

14.1%

14.1%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
One of the biggest factors affecting Nokia's future, however, lies largely outside of management's control. I refer, of course, to the ongoing European Competition Commission review of Nokia's planned purchase of Navteq (NYSE: NVT).

Non-commoditized cell phones such as the E90 appear to be helping Nokia escape the fate so long predicted for it. And in an effort to continue improving the functionality of its devices, Nokia bid last year to acquire the world's leading provider of digital maps used by GPS devices -- a clear indication of the firm's desire to turn its phones into phones-slash-GPS devices. But as I described late last month, Euro-red tape now threatens to foul the deal. In the best case, this could delay completion of Nokia's purchase; in a worse case it might impose conditions on the deal that could wholly or partially invalidate the logic that spawned it; and in the worst case it could scotch the merger altogether.

Foolish takeaway:
Thursday's numbers promise to be brilliant. But try not to be so dazzled by Nokia's stellar business performance that you fail to notice the gloomy cloud of bureaucracy maneuvering into the background.

For more on the Finn phenom, read:

Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.