Summer daze... Lehman just gave Nokia a buy recommendation... CS First Boston initiated Nokia coverage with "strong buy"... stock is zooming over 85 bucks... May industrial production in Finland in "information technology" sector soared by over 70% which means that Nokia's Finnish production probably increased by 80-90% in May... there are now over 4 000 Nokia millionaires in Finland, which would be comparable to one company producing 200 000 millionaires in USA... according to recent analysis Nokia is responsible of 2% of the 5% increase in Finnish GDP this year...
Today's Businessweek has a great article savaging the Philips/Lucent mobile phone joint venture. According to the article the company had just 2% market share last year. Their American digital phones were half a year late and are now being slaughtered by Nokia. AT&T quote: "everything is taking backseat to Nokia now". Philips expected to report truly gory handset manufacturing losses next week. Joint venture losses were 60 million dollars in Q4 -97, ballooning to dizzy 160 million dollars in Q1 -98. There is already talk about either company exiting handset business or buying Motorola's handset division rather than risking the losses damaging the mother companies' profit growth. This article was even better than last week's "Burying Motorola" in Fortune... though the picture of a Motorola phone as a tombstone is still my favorite pin-up.
"Taloussanomat" says that Nokia's next week's quarterly results are expected to be "haeikaeisevaet", which would be something between "dazzling" and "blinding". Hard to keep up with the consensus estimates, because they change almost daily, but today's number was 2,75 billion markkaa profit. I say 2,9. Nokia's 6100 phones are replacing mainly 2100 phones, which were a lot cheaper: as a result the average price Nokia gets from its phones could be considerably higher now than a year ago. Never mind the network division, nobody's interested in that right now. I'm looking for 50% profit increase in handset division, sales might grow slightly slower. Consensus is around 40-45%. Ericsson is expected to post 45% sales increase in handsets as well... look closely at this result and it will tell just much Nokia is gaining share: if it can take it from Ericsson, it can take it from any company.
Tero
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