With first-quarter earnings drawing to a close, industry peers are doing various analysis and comparisons to gauge the underlying metrics and relative performance. Let us perform a similar comparative analysis between two stocks in the Zacks Wireless Equipment industry— Nokia Corporation NOKand Motorola Solutions, Inc.
MSI— to pick the better investment option.Earnings Scoresheet
Nokia’s first-quarter 2018 earnings (non-IFRS) per share of €0.02 or 2 cents missed the Zacks Consensus Estimate of 3 cents. In the year-ago period, the company reported non-IFRS earnings of €0.03 per share. Net sales decreased 9% year over year to €4,929 million ($6,057.3 million) and missed the Zacks Consensus Estimate of $6,271 million. The top line primarily declined due to currency woes and lower net sales in North America. Quarterly adjusted gross margin was 39.4% compared with 40.8% a year ago. Adjusted operating margin decreased 150 basis points to 4.8% on a year-over-year basis. The margins were impacted by adverse currency fluctuations and soft market conditions in North America.
Motorola reported strong first-quarter results on the back of healthy growth across all geographic regions. GAAP earnings for the reported quarter were $117 million or 69 cents per share compared with $77 million or 45 cents per share in the year-earlier quarter. The year-over-year improvement was primarily attributable to top-line growth. Excluding non-recurring items, non-GAAP earnings for the reported quarter were $1.10 per share compared with 71 cents in the year-ago quarter. The bottom line exceeded the Zacks Consensus Estimate of 86 cents. Net sales in the reported quarter came in at $1,468 million compared with $1,281 million in the year-ago quarter, driven by organic growth of 10% and healthy performance across all regions. Quarterly sales exceeded the Zacks Consensus Estimate of $1,371 million.
Based on first-quarter earnings, Motorola has a clear edge over Nokia due to a better earnings and sales surprise percentage.
Price Performance
In the past year, Motorola clearly outperformed Nokia with an average return of 29.2% against a loss of 0.5% for the latter while the industry gained 5.1%.