Nokia Corporation (NYSE: NOK) is magically trading higher after earnings. The reaction is certainly not due to any great accomplishments. There is probably some short covering, but the real news is the promise for more cost cuts. Nokia will cut its way to prosperity.
The head of sales is also leaving the company. Nokia’s loss in the first quarter amounted to 0.08 Euro per share. The loss was a cent wider per share than the consensus targets in Europe. Since Nokia had already issued an earnings warning for the first two quarters, Wall Street and Helsinki had already thrown in the towel on ay grand expectations here. While Apple Inc. (NASDAQ: AAPL), Samsung, and even Google Inc. (NASDAQ: GOOG) makes sales after sales, Nokia is betting on the Windows O/S from Microsoft Corporation (NASDAQ: MSFT) to drive its future.
Nokia has also committed to announce the details of the coming cost cuts soon. It is sad to say, but the company should already know many of these cuts. Sales of the new Lumia phones have been mixed but the company said that U.S. sales and some other markets have so far exceeded the company’s internal expectations. The U.K. was called “challenging.”
Nokia is not in a potential value situation. This is a troubled turnaround at this point. Sadly, some will question the company’s future and it is not a mystery as too why. This also comes to a blow for the nation of Finland. Nokia shares are up about 1% at $4.01 in pre-market trading of the ADRs in New York.
This morning’s gain in the stock should be considered a down-payment on hope rather than a reward for any success. Shares have recently hit not just a year low, but a low not seen in a decade.
JON C. OGG