Nokia Corporation (NOK): Examining Past Post-Earnings Reactions

19 days have passed by since the last earnings report for Nokia Corporation (NYSE:NOK) and the new quarterly results look set to arrive in 72 days. The shares of NOK at the moment are trading at a volume of 12.32 million, which compares with its normal daily standard volume of 22784073 shares. This has led to the shares of the company declining by -1.85%, currently exchanging hands at $5.31 a share. NOK stock has been up by $1.34 (-20.15%) ever since it reached its 52-week high of $6.65 back in January 30, 2019. It has progressed above its 50-day moving average of $5.21 and is up 0.38% over the past week. The stock has added 4.2% since the last one arrived so the question here is that will the upbeat trend in that time frame continue leading up to its next earnings release, or is the NOK share price due for a correction?

Nokia Corporation (NOK) Forecasts And Latest Quarter Earnings

Ahead of their fiscal third-quarter to be released on Thursday, Oct 24, 2019, 8 analysts who are covering the company are estimating that it will record a profit of $0.07 per share, with analysts having different outlooks from $0.04 to $0.09. The current agreed outlook, when compared to the profit recorded last year, is at $0.07 a share, thus a decrease of 0% is expected. The profit view for a complete financial year for Nokia Corporation is expected to be around $0.27 in current year, a growth of nearly 0% from last year which was $0.27.

Let’s now look at their sales section, NOK’s revenue is estimated to be $6.49B, a figure which is less than the $6.49B recorded for Q3 last year. Their sequential sales though are expected to fall by -1.1% from their Q2’s sales which were $6.39B. Their full-year outlook is pegged at $26.08B, implying that there would be a drop of -2.03% over the $26.62B they recorded last year in revenue. Nokia Corporation is projected to get sales lifted by 2.99% in the next quarter, with a revenue target of $26.86B.

Analyzing The Earnings History Of Nokia Corporation (NYSE:NOK)

In the past few years, the NOK stock has been known to miss the Wall Street’s earnings projection. The company missed 25% of the time, according to the data pulled on their earnings, was able to meet predictions on 2 occasions and topped expectations 7 times. Looking at the past trend, the price of Nokia Corporation shares had risen following the release of their earnings in 11 of the last 22 quarters.

Looking back, here is how Nokia Corporation (NOK) stock reacted to earnings misses and beats. It gave investors reason to cast doubts with the price going down after 2 of the last four earnings reports. The shares of Nokia Corporation recorded 10.04%, -8.46%, -3.35% and 1.14%, respectively, on the first day of past earnings releases. After a week of earnings reports, the changes were 4.44%, -9.84%, -7.91% and 6.84%. Their post-earnings price movements have resulted in an average decrease of -0.16% and an average decrease of -1.62% in Nokia Corporation on next day and 7th day, sequentially. NOK’s one month stock performance led to its shares rising by 4.12% with a return of -0.93% witnessed over the last 52 weeks.

The higher number of analysts at Reuters has assigned a buy or better ratings (8) on the Nokia Corporation stock, while 2 of them have a rating of a Hold with the 11-year target price suggested by the analysts standing at $6.62. This price target implies potential upside of 24.67 percent over the next 12 months based on the current share price.

Nokia Corporation (NOK) Post Earnings Announcement Drift (PEAD)

Back on July 25, 2019, Nokia Corporation (NYSE:NOK) released its Q2 results, in which it recorded EPS of $0.06 that exceeded consensus estimates of $0.03. After the earnings were reported, the price of NOK stock kicked off the session at $5.51 and remained in a range of $5.55 to $5.77 on the first day. The shares were priced at $5.7 at the close with a total volume of shares being 92429512.

On April 25, 2019, the Q1 earnings report was disclosed with loss per share of -$0.02. This was below the estimation of $0.02 per share. The stock price range of NOK was between $5.34 and $5.35 on the first-day post announcement, after opening the day at $5.2. The session came to close at $5.3 and there was a total volume of 72436328 shares.

January 31, 2019 was the day when its Q4 results were unveiled. The earnings came in at $0.15, beating the projected $0.14 per share. The very next day, NOK stock opened at $6.21 while staying in a range of $6.36 to $6.4. At the end, it moved to $6.35 a total volume of shares been 71227864.

In the year-ago Q3 earnings on October 25, 2018, the company saw profit per share of $0.07. That was better than the $0.06 analysts had expected. Nokia Corporation share price started at $5.27 on the first full trading day post-earning and then exchanged hands between $5.31 and $5.42 throughout the session. The closing price of $5.32 came on the back of 23972304 shares in volume.