Nokia in Q1: Sector Positive
nokia.com
Looking good, beating all street estimates ... even though unit sales were only 53.8 million units (share loss compared to Q4, but higher than 2004 share) and 2.1 million less than I projected. On top of Motorola's strong results, and good numbers from Samsung, this should set a somewhat positive sector tone. I'm pleased to see them having a reasonably complete view of handset sales (170 million units for the quarter, v. Motorola's 168 million and my 173 million updated WAG). I'm interested in seeing their view of volume and mix by technology.
* Nokia reports Q1 2005 net sales of EUR 7.4 billion and EPS EUR 0.19
--> Nokia’s first-quarter 2005 net sales increased 17% to EUR 7.4 billion, compared with EUR 6.3 billion in the first quarter of 2004. At constant currency, group net sales would have increased 19%.
--> Nokia’s first-quarter operating profit grew 10% year on year to EUR 1.1 billion, compared with the first quarter 2004 (EUR 1.0 billion) with an operating margin of 15.1% (16.1%).
--> Operating cash flow for the quarter ended March 31, 2005 was EUR 1.3 billion, compared with EUR 0.9 billion in Q1 2004, and total combined cash and other liquid assets were EUR 12.6 billion, compared with EUR 11.5 billion at 31 December 31, 2004. As of March 31, 2005, net debt-to-equity ratio (gearing) was -94%, compared with -79% at December 31, 2004.
According to analysts polled by Thomson First Call, Nokia Corp. (NOK) is expected to earn 15 euro cents a share on 7.216 billion euros ($9.353 billion) in revenue, compared with a profit of 18 euro cents a share on revenue of 6.625 billion euros in the year-ago quarter.
* Total mobile device sales volume achieved by the Mobile Phones, Multimedia and Enterprise Solutions business groups reached 53.8 million units, a year-on-year rise of 20%, and a sequential decline, mainly due to normal seasonality, of 19%.
--> Overall market volumes for the same period reached an estimated 170 million units, representing 20% annual growth and a 13% sequential decline.
--> In smartphones, the total industry volume for the first quarter reached an estimated 10 million units, while Nokia’s own smartphone volumes grew to 5.4 million units, compared with 1.8 million units in the first quarter 2004.
* ASP of 110 euro
J.P. Morgan and SG Securities both expect the average selling price of handsets to have declined -- albeit slightly -- this quarter. J.P. Morgan sees a drop of 1% from the previous quarter to 105 euro, while SG Securities sees a price slip to 104 euros.
* Second-quarter Nokia group net sales are expected to be in the range of EUR 7.9 billion to EUR 8.2 billion, compared with EUR 6.5 billion in the second quarter 2004.
--> EPS (diluted) is expected to be in the range of EUR 0.15 to EUR 0.18, compared with EPS (diluted) EUR 0.15 in the second quarter 2004, which included a positive impact of EUR 0.03 from special items.
--> Raises 2005 mobile device market volume estimate to 740 million.
Guidance is key ... J.P. Morgan said "We believe Nokia would be reluctant to provide aggressive guidance on the second quarter - which, in our view, would be necessary to drive material upside to the share price." Some analysts suggested that since Nokia has exceeded its own guidance in the last couple of quarters, if it only meets expectations this time, the market reaction could be negative.
Guidance looked good to me.
We'll see how the market reacts to all this. I think it should be positively. Ericsson tomorrow hopefully positive on WCDMA buildouts.
Nokia had only 1.87x the unit sales of Motorola. That's a rather narrow gap for Nokia, and their unit share is a little lower than I'd hoped for. Hats off to Motorola. They continue to execute pretty darned well. Nokia has work to do in the USA, for sure. Nokia had only 1.87x the unit sales of Motorola. That's a rather narrow gap for Nokia, and their unit share is a little lower than I'd hoped for. Hats off to Motorola. They continue to execute pretty darned well.
Nokia's View: The Global Device Market Q1 2005 by Technology
·
Q105 Q1 05 ¦
Units QoQ Share ¦
===== ====== ¦
TDMA 1m (-43%) 0.6% ¦
iDEN 3m (-19%) 1.8% ¦
PDC 5m (-12%) 2.9% ¦
WCDMA 8m (+14%) 4.7% ¦
CDMA 31m (-14%) 18.2% ¦
GSM 122m (-13%) 71.8% ¦
==== ====== ¦
Nokia 170m 100.0% ¦
·
Nokia's View: The Global Device Market H2 2005 by Technology
·
Q304 Q3 04 ¦ Q404 Q4 04 ¦¦ H1 04 Q4 04
Units QoQ Share ¦ Units QoQ Share ¦¦ Units Share
===== ====== ¦ ===== ====== ¦¦ ===== =====
TDMA 3m (-33%) 1.9% ¦ 2m (-31%) 1.0% ¦¦ 5m 1.42%
iDEN 3m (flat ) 1.9% ¦ 4m (+26%) 2.1% ¦¦ 7m 1.99%
PDC 6m (flat) 3.8% ¦ 5m (-25%) 2.6% ¦¦ 11m 3.13%
WCDMA 4m ( ?? ) 2.5% ¦ 8m (+83%) 4.1% ¦¦ 12m 3.40%
CDMA 31m (+07%) 19.6% ¦ 36m (+19%) 18.6% ¦¦ 67m 19.03%
GSM 110m (+08%) 69.6% ¦ 137m (+23%) 70.6% ¦¦ 247m 70.17%
Other¹ 1m N/A 0.7% ¦ 2m N/A 1.0% ¦¦ 3m 0.08%
==== ====== ¦ ==== ====== ¦¦ ==== =======
Nokia 158m 100.0% ¦ 194m 100.0% ¦¦ 352m 100.00%
Gartner 167m ¦ 195m ¦¦ 362m
Note: Jorma says WCDMA sales in first 3½ months somewhat slower than Nokia expected. May be lower than Nokia was projecting in November/December.
My updated Handset Sales WAG ...
Q1 04 Q1 04 ¦ Q1 05 Q1 05
Company Units Share ¦ Units Share
======= ===== ===== | ===== =====
Nokia¹ 44.7m 29.2% ¦ 53.8m 31.2%
Motorola¹ 25.3m 16.5% ¦ 28.7m 16.7%
Samsung¹ 20.1m 13.1% ¦ 24.5m 14.2%
Siemens 12.8m 8.4% ¦ 11.3m 6.6%
LG¹ 8.8m 5.7% ¦ 11.1m 6.4%
SEricsson¹ 8.8m 5.7% ¦ 9.4m 5.5%
Others 32.6m 21.3% ¦ 33.5m 19.4%
======= ====== ¦======= ======
Total 153.1m 100.0% ¦172.3m 100.0% +12.5%
·
¹ Actual reported sell-in. Others estimated.
- Eric - |
