From the same link:
"Nokia Chief Executive Stephen Elop said the company has stabilized its mobile-phone business in the past quarter and the new phones were steps toward recovery."
Makes the "fluffing" arguments topical again...
I agree they've "stabilized" the business... only, that's not any more useful here than owning any other "stable" business that has you hemorrhaging way more cash than you can possibly make from that business... while losing more ground in the segment of the market that has more useful margins. So, "stable" meaning... in a stable decline relative to the competition at the top end ? So, enabling that ... while losing money and sustaining the "stable" low margin businesses that have you positioning as the K-Mart of the device providers... you might want to check it with Charlie, but, that isn't "winning"...
When I look at the performance in the market... and the numbers they posted, paired with the accounting effort clearly focused on shifting a few things around... the wrong way... the numbers don't appear to make any sense... unless you anticipated there would be that sort of legerdemain in the numbers... the same thing in issue as they've been using at MSFT to cover under-performance in their new businesses, for a long time...
Only, NOK doesn't have the "fall back" that MSFT does in a cash cow that enables them in sustaining failure.
So, I think the issue in accounting flexibility is going to play out with a strong dependence on "the result" in the pre-announced "recovery"...
I don't expect to see a recovery... because I don't think they've identified, much less fixed, the problem...
Still, if NOK managed to pull off the "comeback"... even temporarily... then they'd perhaps have the accounting flexibility required to enable them in trying to "make the prior story stick"..
But, if the "comeback" doesn't pan out... then they won't have numbers that will enable support of the prior story... and when the effort in "fluffing" comes apart, then, there'll be nowhere left to hide. They'll either have to come clean on the fact in the prior performance... including recognition of things they'd hidden in the last Q... fluffing... and the impact of channel stuffing... or they'll have to cross some even more bright lines in the accounting that will ensure they impose the result they'll be trying to avoid in the effort... more definitively... if with a delay that won't matter in the end, other than by ensuring that there will be an end that is definitive.
I discount the focus on "sustaining the cash position" as being relevant in determining the outcome of the competition... particularly when they're carving meat off the bones in order to present the side dish of a stable cash position... while claiming that ignoring the missing meat shows they're "healthy"...
Expect to see assets continuing to shrink... as Elop sells more of the seed corn faster... to sustain cash... |
