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The Zacks Analyst Blog Highlights:Nokia, Apple, Research in Motion, MetroPCS Communications and Advanced Micro Devices



 The Zacks Analyst Blog Highlights:Nokia, Apple, Research in Motion, MetroPCS
                  Communications and Advanced Micro Devices

PR Newswire

CHICAGO, Jan. 22, 2013

CHICAGO, Jan. 22, 2013 /PRNewswire/ -- Zacks.com announces the list of stocks
featured in the Analyst Blog. Every day the Zacks Equity Research analysts
discuss the latest news and events impacting stocks and the financial markets.
Stocks recently featured in the blog include Nokia Corporation (NYSE:NOK),
Apple Inc. (Nasdaq:AAPL), Research in Motion Limited (Nasdaq:RIMM), MetroPCS
Communications Inc (NYSE:PCS) and Advanced Micro Devices Inc (NYSE:AMD).

(Logo: http://photos.prnewswire.com/prnh/20101027/ZIRLOGO)

Get the most recent insight from Zacks Equity Research with the free Profit
from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday's Analyst Blog:

Earnings Preview: Nokia

Nokia Corporation (NYSE:NOK) is set to release its fourth-quarter 2012 results
before the opening bell on Wednesday, January 24.

Despite posting a 25% positive surprise in the third quarter, Nokia failed to
improve its top and bottom line results compared to the last year as its
Windows-based smartphone Lumia failed to generate any meaningful market
traction.

Factors to be Considered this Quarter

Things are, however, looking better in the current quarter as the company
expects significant improvement in its Device and Service segment based on the
good show by its flagship Lumia and low-end smartphone Asha.

The company reported in its preliminary report that it sold 4.4 million Lumia
devices against 2.9 million units in the previous quarter, marking a
sequential growth of nearly 52%. Nokia also sold 9.3 million units of Asha
range of handsets in the fourth quarter, far better than 6.5 million handsets
sold in the previous quarter, thereby posting an impressive sequential growth
of about 43%.

It appears that the company's decision to develop Windows-based phones has
started showing positive signs as the large screen Lumia 920 with some great
imaging and mapping feature is attracting more customers. Gaining significant
market traction in the emerging market is primarily attributable for the good
results from Asha.

Unlike the third quarter, Nokia's activities in the fourth quarter were enough
to win analysts' confidence. The Zacks Consensus Estimate for the fourth
quarter has improved in the last seven days from a negative earnings estimate
of 1 cent to a current estimate of break even earnings.

Earnings Whispers

Our proven model does not conclusively show that Nokia Corporation is likely
to beat the Zacks Consensus Estimate in the fourth quarter. That is because a
stock needs to have both a positive Earnings ESP (Read: Zacks Earnings ESP: A
Better Method) and a Zacks Rank #1 (Strong Buy) or at least Zacks Rank #2
(Buy) or Zacks Rank #3 (Hold) for this to happen. Unfortunately this is not
the case here as elaborated below.

Break Even Zacks ESP: This is because the Most Accurate estimate stands at
$0.04 while the Zacks Consensus is lower at $0.00. This leads to a break even
ESP for Nokia.

Zacks Rank #1 (Strong Buy): Nokia's Zacks Rank of 1, however, increases the
predictive power of ESP. That said we also need to have a positive ESP to be
confident for an earnings surprise call.

Other Stocks to Consider

Here are some other companies you may want to consider as our model shows they
have the right combination of elements to post an earnings beat this quarter:

Apple Inc. (Nasdaq:AAPL) has Earnings ESP of +3.34% and carries a Zacks Rank
#3 (Hold). It is scheduled to report its fourth quarter results on January 23.

Research in Motion Limited (Nasdaq:RIMM) is scheduled to release its fourth
quarter fiscal 2013 results on March 28. It currently has a break even
Earnings ESP and holds a Zacks Rank #3 (Hold).

MetroPCS Communications Inc (NYSE:PCS) has an Earnings ESP of positive 23.08%
and carries a Zacks Rank #3 (Hold). It is scheduled to release its fourth
quarter results on January 26.

However, creating a niche for itself amid a crowded smartphone market remains
the biggest challenge for the Finnish handset manufacturer.

Will AMD Beat Estimates?

We expect online retailer chip maker Advanced Micro Devices Inc (NYSE:AMD) to
beat expectations when it reports fourth quarter 2012 results on January 22nd.

Why a Likely Positive Surprise?

Our proven model shows that Advanced Micro is likely to beat earnings because
it has the right combination of two key ingredients.

Zacks ESP: The Earnings Surprise Prediction or ESP, which represents the
difference between the Most Accurate estimate and the Zacks Consensus
Estimate, is at +30.0%. This is very meaningful and a leading indicator of a
likely positive earnings surprise for shares.

ZacksRank #3 (Hold): Note that stocks with Zacks Ranks of #1, #2 and #3 have a
significantly higher chance of beating earnings estimates. The sell-rated
stocks (Zacks Rank #4 and #5) should never be considered going into an
earnings announcement. 

The combination of Advanced Micro's Zacks Rank #3 (Hold) and +30.0% ESP makes
us reasonably confident about looking for a positive earnings beat on January
22nd.

What is Driving the Better than Expected Earnings?

Given the weak PC market, Advanced Micro's decision to diversify its business
into new embedded markets along with the recent restructuring initiatives are
likely to lead to a positive earnings surprise in the upcoming quarter.

The company is diversifying its business into new embedded markets, including
communication, industrial and gaming among others. It expects to increase the
revenue contribution from its embedded business to almost 20% from the mere 5%
level at which it is currently. The restructuring initiatives will reduce the
company's expense base by 25%.

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