Cell got hurt today. Poor Brightpoint. From what I could tell,
their model needs work. In China, Nokia and Ericsson are selling hot phones through carriers and Cell isn't getting what they want. It seems there is no slowdown in cell phone sales, so I conclude that Nokia will not be hurt by this apparent indicator.
The real question is with currency risks. Brazil is 5-10% of sales and there is 30% currency risk there. 1.5 to 3% earnings risk??
China 10%-15% of sales 15% currency risk. 1.5-2.25% earnings risk??
I haven't run these calculations out, and currency translation is complex. On the possitive side Nokia manufactures there in China and I believe Brazil, so costs decline with revenues. This suggests that the earnings impact won't be so great... in line with what I mentioned earlier.
Curiously, these numbers are below the upside surprises of the last
two quarters.
This year will be tougher, with tougher earnings comps. But I see no end in new great models all over the world, end market demand remains strong. I think infrastructure sounds strong, and I am impressed by what I hear Nokia doing on the wired side of the business too. Forget the monitor business, although it may help handset TV like displays. So I bought the dip today.
Cheers |
