Why Nokia Stock Jumped 12.6% Thursday Morning

Shares of Nokia (NYSE: NOK) found a crystal-clear wavelength on Thursday, Jan. 25. The Finnish provider of wireless phone network systems and related services reported fourth-quarter earnings early in the morning, sending the stock as much as 12.6% higher after the market open. The raw results were far from impressive, but management made up for the weak financial numbers with bullish commentary on a leaner operating model and improving market conditions.

As noted, Nokia's Q4 results weren't great by the numbers. Net sales fell 21% year over year to $6.1 billion, hampered by limited orders from North American clients as they ride out the inflation crisis by tapping into overstocked equipment inventories. Adjusted earnings landed at $0.11 per diluted share, down from $0.16 per share in the year-ago report. Your average analyst expected earnings of roughly $0.15 per share on revenue near $7.1 billion.

On the upside, Nokia's operating margins widened in two of the three main business divisions. The mobile networks margin increased from 6.8% to 11.5%, while cloud and network services reported a 22.8% margin, up from 13.9% one year earlier. Segment-level sales were down across the board, but networks still saw operating profits rise by 45%, and services tallied 56% higher profit results. The cost-cutting program Nokia instituted last year is making a difference here.

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Source Fool.com