Nokia Earnings: Environment Improving After Another Big Sales Drop

Nokia experienced another huge sales decline in its first quarter, which is unsurprising considering the generally depressed global market for communications equipment over the past year and robust spending on mobile equipment in India during the first half of last year. In a report that closely mirrored Ericsson’s earlier this week, Nokia did exhibit and articulate some positives, notably margin expansion, progress on a cost-efficiency program, and an expectation that sales are poised to turn up. We are maintaining our EUR 5.50 fair value estimate for the no-moat company.