Shares of Nokia fell 15.1 percent in 2017, according to data from S&P Global Market Intelligence. The decline rested entirely on a single day in October, when the Finnish network equipment and services giant reported solid earnings with a side of gloomy guidance.
Nokia's third-quarter report, which was published on Oct. 26, was a mixed bag. Adjusted earnings more than doubled year over year to USD 0.11 per share and exceeded Wall Street's USD 0.07 target, but top-line sales fell 7 percent and missed the consensus estimates.
Management comments pointed to a rough few quarters ahead in the global market.
"We experienced some challenges in our Mobile Networks business and see a continued decline in our primary addressable market in 2018," said Nokia CEO Rajeev Suri in a prepared statement. "That decline, which we estimate to be in the range of 2 percent to 5 percent, is the result of the multiple technology transitions under way; robust competition in China; and near-term headwinds from potential operator consolidation in a handful of countries."
Investors ignored the strong bottom-line performance in the third quarter and focused on the coming quarters' soft wireless equipment sales. Share prices fell 19 percent that day and still haven't recovered.
That being said, a market slump lasting halfway into 2018 would give us plenty of time to dive deeper into Nokia's business prospects and make informed decisions about investing in this stock -- or stepping back from it. If there's a big rebound coming, it's not happening until the somber story actually turns brighter again.
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