Nokia's mobile network results were awful. Not quite the disaster that Motorola's network unit was, but pretty stiff competition. Revenues up 19%, but profit down 33%. Infra margins plunged from 15% to below 9%. Is Ericsson really sucking all the oxygen out of the network market? Or is there a soft patch?
[Edit] Haven't read it yet but I notice that Tero has a new posting titled 'Infra Scare Unfolding' up on RealMoney, and I suspect he is commenting on Ericsson (ERICY). I have some sector concern here (and Tero may as well). Handset sales are truly "trrrrific!" and so are wireless ICs. The problem I see is that for full sector health, Handsets, and Infra, and Chips, and Services, ALL need to be clicking. For 3G handset sales to be as robust as we'd like to see, a lot of profitable WCDMA and 1xEV-DO infra needs to be put in place. It all needs to play together in perfect harmony, and right now Infra seems to be off key.
Moi?
It looks like I left a little money on the table when I took considerable profit (+75% exclusive of last years dividend) by reducing 50% at $21.25 a few weeks back, passing up the dividend on those shares, but I'll be buying on a dip during the dog days when carriers and retailer executives. and brokers, are frolicking up and down the Côte d'Azur.
This looks to me like it is going to be a fine Nokia year. The products being released in Q2 are exceptional and when fully ramped should put Nokia in great shape for Q2 and Q3. In his yesterday report Per Bear Lindberg expressed concern about Nokia's inventory build which I view as a positive because that's new fresh product readying to ship in volume. We haven't seen the new product that will soon lunch behind that -- but we will. Nokia ALWAYS goes into the Q4 Blitzkrieg with guns fully loaded, the engine firing on all cylinders, and new treads on the tank. I expect no less this year. Nokia has come a long way in the last two years since that dismal Q1 2004 report. Whoopee!
You?
What think thee, other than "trrrrific!" ????
Best
- Eric - |
