Talk about a shocker!

Struggling phone maker, Research in Motion (Nasdaq: RIMM), reported better-than-expected results after the bell yesterday. And the left-for-dead stock vaulted 15% higher in early trading today.

The company’s still losing money, of course. Just not nearly as much as everyone anticipated. Or as Shaw Wu, an analyst at Sterne Agee, said, “It’s still bad, but it’s a much smaller disaster than expected.”

[ad#Google Adsense 336×280-IA]Research in Motion doesn’t pay a dividend, though.

So, why am I bringing it up here?

Because its partner in sucking at the mobile phone industry, Nokia (NYSE: NOK), does pay a dividend.

A tempting one, too.

At current prices, Nokia’s expected yield checks-in at 6.8%.

What’s more, in the last year, Nokia’s stock cratered just like Research in Motion’s.

For the same reason, too. It’s struggling to keep up in a market dominated by Apple’s (Nasdaq: AAPL) iPhones and devices using Google’s (Nasdaq: GOOG) Android operating system.

Add it all up and I don’t want anyone getting any stupid ideas. Even if Nokia’s stock miraculously rallies in the short term like Research in Motion’s, due to some unknown transitive property of suckiness, it’s still a terrible dividend investment.

Nokia’s underlying business continues to wither away. As a consequence, just like with RadioShack (NYSE: RSH), I’m convinced its high yield is in jeopardy of being cut. Completely.

Blaspheming a Fallen Angel? Hardly!

If ever there was a fallen angel stock, it’s Nokia.

Consider: Before Apple introduced the iPhone in 2007, Nokia dominated the mobile phone industry with more than 50% global marketshare.

Today, it only has a 6.6% share, according to IDC. Not surprisingly, Nokia’s stock nosedived about 90% as it’s given up so much ground.

Today, the stock’s cheap because it deserves to be cheap. Simply put, the company’s struggling to remain relevant. And losing.

Nokia’s slashed more than 20,000 jobs, shuttered R&D facilities and sold off non-essential assets in an effort to return to profitability. And still, in the first six months of 2012, the company reported a net loss of about $3.1 billion.

There’s no end to the bloodletting in sight, either. Analysts expect at least six more quarters of losses.

Making matters worse, despite its troubled situation, Nokia continues to blow money like a lottery winner.

As Bloomberg reports, the company’s burning through $300 million in cash per month to try to regain marketshare. There’s not an unlimited supply of the green stuff, though.

In the last year, the company’s net cash balance (cash minus outstanding debt) got chopped in half. If we factor in the current burn rate and the dividend payments of about $1 billion per year, the company’s going to be left with less than $4 billion at the end of the year. Then there’s a pesky bond maturity of about $1.6 billion in early 2014.

The company’s set to start selling its newest phone, the Lumia 920, in November. Concerns are already popping up about it being too expensive. That doesn’t bode well for the company’s slipping sales figures and, in turn, its financial position.

Ultimately, suggesting Nokia’s going to ax its dividend isn’t a stretch.

After all, the company’s already slashed its payout by 50% over the last four years. And one last and final cut actually makes fiscal sense. Nokia just can’t afford its dividend anymore.

As the analyst from Nordea Bank AB, said, “It was a mistake not to stop the dividend payment given the [company’s] weakened outlook.” Indeed.

Before long, management won’t have the luxury to make mistakes. It’ll be forced to cut the dividend to survive.

It’s important to realize, Nokia doesn’t pay a quarterly dividend. It pays an annual dividend in May of each year. So there’s no possibility of cheating death as investors stick around to earn a dividend payment or two while the company’s business continues to wither away.

Bottom line: Nokia typically announces its annual payout when it reports results in January. I fully expect management to come wielding an ax. Any investment in the stock, especially by income-oriented investors, is a pure gamble. A bad one at that.

Safe investing,

Louis Basenese

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Source: Dividends and Income Daily