Technology Stocks

Why Nokia Oyj (NYSE:NOK) May be a Ship Built for Rough Waters

Nokia Oyj (NYSE:NOK) recently announced further steps to align its organizational structure to its strategy, strengthen its leadership team and position the company for success in the 5G era. This sends a strong and likely important message.

As we have noted, the challenge for the mobile communications technology ecosystem stocks is likely going to be something like a spitting contest to vie for who is most “all about 5g” over the next year. Expect to see a number of announcements similar to this one. It is effectively about marketing to the investment marketplace.

Nokia Oyj (NYSE:NOK) has, in any case, started to more assertively market its chops as a central leadership play in the increasingly important 5G mobile communications shift theme.

This is going to define performance in the space for at least the next year, and companies will likely be working very hard to gain association among retail and sell-side as a top-tier, aggressively positioned name around that theme.

“Nokia has a unique advantage in the 5G era with its end-to-end portfolio,” said Nokia President and Chief Executive Officer, Rajeev Suri. “By creating a single Access Networks organization that includes both fixed and mobile, we can improve our customer focus, simplify our management structure, and more efficiently leverage our full portfolio.”

As we said, expect to see a lot of this sort of thing. The stock has suffered a bit of late, with shares of NOK taking a hit in recent action, down about -6% over the past week. That said, we actually like this stock right now for several reasons, and the combination of valuation, strong dividend yield, and placement as a 5G play should offer strong support during rocky market action.


Ahoy Oyj

Nokia Oyj (NYSE:NOK) trumpets itself as a company that engages in the network and technology businesses worldwide.

The company operates through four segments: Ultra Broadband Networks, Global Services, IP Networks and Applications, and Nokia Technologies.

It provides mobile networking solutions, including hardware, software, and services for telecommunications operators, enterprises, and related markets/verticals. It also offers fixed networking solutions, such as copper based solutions; fiber-to-the-home solutions, including Ethernet point-to-point, gigabit passive optical networks, EPON, and 10 gigabit next generation fiber technologies; fiber access products, solutions, and services; and public switched telephone network transformation, ultra-broadband network design, deployment and operation, site implementation and outside plant, and multi-vendor maintenance services.

In addition, the company provides network implementation, care, and professional services for mobile networks; and managed services, such as network and service management, build-operate-transfer model, hosting, analytics, Internet of Things (IoT), cloud, and security operation services for the fixed, mobile, applications, Internet protocol (IP), and optical domains.

Further, it offers network planning and optimization services to enhance the network performance and quality, and analytics-based services; and network architecture, integration, customization, and migration services. Additionally, the company provides IP/optical networking solutions, including IP routing and optical transport systems, software, and services; software solutions, such as customer experience management, network operations and management, communications and collaborations, policy and charging, as well as Cloud, IoT, security, and analytics platforms; and submarine networks and radio frequency systems. It has a collaboration agreement with Filtronic; and strategic alliance with Infosys.

Nokia Oyj (NYSE:NOK) pulled in sales of $5.5B in its last reported quarterly financials, representing top line growth of -0.8%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($5.6B against $13.4B, respectively).

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