Can Nokia Capitalize on This New Phone?

Nokia (NYSE:NOK) needs a successful smartphone offering.

The Finnish smartphone manufacturer’s pre-fourth-quarter earnings announcement showed investors that its operating margin had surpassed the company’s guidance for the period; previously, Nokia had predicted a margin ranging from 4 percent to 12 percent, but results are now expected to fall between 13 percent and 15 percent.

However, while the margin improvement was good news for the company’s financials, critics were left unimpressed by its forecast for phone sales. Nokia said that it shipped 4.4 million devices in the fourth quarter, above the 3.8 million predicted by analysts at Baird, but below the 6.5 million Wells Fargo estimated. Analysts found the low sales concerning. Barclays analyst Jeff Kvaal wrote in a note seen by Barron’s that “neither Lumia nor Windows Phone has reached critical mass,” and downgraded the company’s shares last week to Underweight. He added, “CES checks showed few signs WP8’s promise is converting to sustained demand.”