It looks like these two companies have had a reset of investor bias, each with solid earnings. Alcatel-Lucent (NYSE: ALU) and Nokia Corp. (NYSE: NOK) both reported earnings before U.S. markets opened Thursday morning. Each of these companies still need their next “it” thing to drive interest. This week appears to have offered that opportunity for Alcatel-Lucent and Nokia alike through strong earnings.

Alcatel-Lucent reported a net loss of $0.02 in earnings per share (EPS) on $3.45 billion in revenue compared to consensus estimates from Thomson Reuters that called for $0.01 in EPS on $3.79 billion in revenue. The same period from the previous year had a net loss of $0.01 in EPS on $4.49 billion in revenue.

Gross margin reached 34.7% of revenues, improving 230 basis points compared to the first half of 2014.

It is worth noting that ahead of the merger Alcatel-Lucent CEO Michel Combes will depart the company on September 1, 2015 and in the meantime the Chairman, Philippe Camus will act as the interim CEO.

Today, Combes said:

Our second quarter 2015 results represent a significant milestone for Alcatel-Lucent, reflecting the first Q2 of free cash flow generation since the merger of Alcatel and Lucent in 2006. Alcatel-Lucent’s financial results for the first half of 2015 clearly show that the company has delivered on the key objectives of The Shift Plan, launched two years ago. The company is now well on track to complete its turnaround by the end of the year.

Alcatel-Lucent shares closed Wednesday down 0.3% at $3.55 in a 52-week trading range of $2.28 to $4.96. In early trading indications shares were up 5.1% at $3.37. The stock has a consensus analyst price target of $4.38.

In its second-quarter earnings report released Thursday morning, Nokia reported $0.09 in EPS on $3.2 billion in revenue versus Thomson Reuters consensus estimates of $0.06 EPS on $3.55 billion in revenue. The second quarter from last year had $0.08 in EPS on $4.03 billion in revenue.

The company listed a few highlights:

• 6% year-on-year net sales growth (4% year-on-year decline on a constant currency basis)
• 12% year-on-year growth in non-IFRS gross profit, with non-IFRS gross margin increasing to 40.0% from 38.1%, primarily driven by an elevated level of software sales within Mobile Broadband and strong performance across Global Services.
• 11% year-on-year growth in non-IFRS operating profit, with non-IFRS operating margin increasing to 11.5% from 11.0%.

Nokia’s CEO, Rajeev Suri, commented on earnings:

While we expect the telecom infrastructure market to remain challenging, I believe that our disciplined operating model and strong execution capabilities will continue to differentiate us in this environment. Additionally, we remain highly focused on reducing costs and improving efficiency in order to mitigate the impact of market conditions.

Shares of Nokia closed Wednesday down 0.5% at $6.59 on a 52-week trading range of $6.26 to $8.73. In early trading indications the stock was up 5.8% at $6.97. The stock has a consensus analyst price target of $8.95.

The question of whether each or both can actually shine again seems to be answered after earnings. Nokia has been stuck in the mud for years and Alcatel-Lucent’s turnaround story is so old that the only reason it attracts so much interest from investors is because of its super-low share price. Both stocks trade at just a mere fraction of their glory days.

With yet another merger approval coming late this last week, investors still have hurdles to clear before this deal actually takes place. Many shareholders have signaled that they think it included no real premium, and that is bad considering the cross-border integrations and internal friction that may take place when the two firms start amalgamating all of these facilities and workers.

One good thing that would come from this merger is that both companies are flush with cash. This would give the companies some serious firepower if they can normalize their expense structure and find proper roll-up mergers that can start immediately adding on to earnings and/or growth.

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