Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Nokia Corp. (NOK) -- Ignore unavailable to you. Want to Upgrade?

To: Eric L who wrote (4836)	4/19/2007 10:49:07 AM
From: Eric L	Respond to of 9255

The Handset Game: Preliminary but Updated with Nokia and LG Results Nokia's report this morning was something of a mixed bag. A good quarter dragged down by networks but not a great one in a quarter where expectations were very high. LG substantially increased mobile device ASP due to product mix. They had better handset profitability than they've had in some time, but like Nokia sell-in was slightly more modest than I expected. Market reaction here to Nokia's report as the day progresses and all is digested will be interesting in so far as it sets a tone for wireless sector and compensating for motorola's dismal news. The NYSE has been open for 1 hour and NOK is up +$0.88 (+3.8%) at $24.79 — yet another 5 Year high, on what I considered to be a good but unspectacular quarter that was below my own expectations in several respects. There have been 11 million shares already traded which is a typical full days volume here. NOK1V is still doing well on the HEX — €18.21 at 17:18, up +3.76% on the day. In the final column of the table below I'm plugging in 259.0 million (reduced from 265.5 million) as the total estimated global sell-in for the quarter which is higher than consensus estimates, and I'm calculating preliminary share estimates on that number. Nokia's view is that sell-through probably exceeded sell-in for the quarter due to channel inventory (principally Motorola's). I think that will probably prove true, but we'll have to wait for Gartner's sell through numbers 4 to 6 weeks from now to confirm that. Sales and share data for Q4'2005 through Q4'2006 is from Strategy Analytics (SA). SA (and IDC) should have preliminary Q1 estimates of global sell-in published by Friday morning after Sony Ericsson reports and I'll recompile the final column shortly after SA publishes their estimate. Global Mobile Device Sell-In for Last 18 Months Global Sell-In Q4 '05 2005 Q1 '06 Q2 '06 Q3 '06 Q4 '06 2006 Q1 '07 ========= ====== ====== ====== ====== ====== ====== ====== ====== Nokia 83.7m 264.9m 75.1m 78.4m 88.5m 105.5m 347.5m 91.1m 34.1% 32.4% 33.3% 33.3% 34.5% 35.2% 34.1% 35.2% --------- ------ ------ ------ ------ ------ ------ ------ ------ Motorola 44.7m 146.0m 46.1m 51.9m 53.7m 65.7m 217.4m 45.4m 8.2% 17.9% 20.4% 22.1% 21.0% 21.9% 21.3% 17.6% --------- ------ ------ ------ ------ ------ ------ ------ ------ Samsung 27.2m 102.9m 29.0m 26.3m 30.7m 32.0m 118.0m 34.8m 11.1% 12.6% 12.8% 11.2% 12.0% 10.7% 11.6% 13.4% --------- ------ ------ ------ ------ ------ ------ ------ ------ SEricsson 16.1m 51.1m 13.3m 15.7m 19.8m 26.0m 74.8m 6.6% 6.3% 5.9% 6.7% 7.7% 8.7% 7.3% --------- ------ ------ ------ ------ ------ ------ ------ ------ LG 16.2m 54.9m 15.6m 15.3m 16.5m 17.0m 64.4m 15.8m 6.6% 6.7% 6.9% 6.5% 6.4% 5.7% 6.3% 6.1% --------- ------ ------ ------ ------ ------ ------ ------ ------ Others 57.6m 197.2m 46.6m 47.7m 47.0m 53.4m 196.7m 23.5% 24.1% 20.6% 20.3% 18.3% 17.8% 19.3% ========= ====== ====== ====== ====== ------ ------ ------ ------ Total 245.5m 817.0m 225.7m 235.3m 256.2m 299.6m 1,018.8m 259.0m 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ========= ====== ====== ====== ====== ====== ------ ------ ------ Growth YoY 24.9% 20.1% 29.6% 25.7% 21.9% 22.0% 24.7% Key Mobile Device Metrics for Q1 2007 Nokia¹ Motorola Samsung SEricsson LG ========== ========== ========== ========== ========== Revenue (EUR) €8,161 Bil €4.061 Bil €3.491 Bil €1.781 Bil Revenue (USD) $5.412 Bil $4.652 Bil $2.374 Bil Units 91.1m 45.4m 34.8m 15.8m Share 35.2% 17.1% 13.1% 6.1% ASP (EUR) €89 €89 €116 €113 ASP (USD) $119 $119 $155 $150 Op. Margin 16.2% -4.8% 13.0% 4.7% · ¹ Nokia combines 3 divisions sales: Mobile Phones, Multimedia Enterprise Notes: • All currency conversions made at March 30, 2007 Interbank rates. • After Sony Ericsson results are in and before I finish this recap tomorrow I plan to add two rows to 'Q1 Key Metrics' — Pre-tax Profit in Euro and USD. Caveat: • The usual applies. I may have inadvertently made typos, transposition errors, currency conversion errors, or calculation errors in compiling data. If anyone spots one, please advise. • In the 18 month sell-in table, 2006 sales by Other's and total units don't cross hatch with the sum of their respective sales by quarter, and this is probably due to SA adjusting data as the year progressed. ### - Eric -

To: Eric L who wrote (4836)	7/16/2007 11:45:17 AM
From: Eric L	Read Replies (3) \| Respond to of 9255

Tracking Q2 Handset Sales to Date ... Q2 2007 Handset Sell-In (Strategy Analytics & Q2 Vendor Reports to Date) Global Sell-In° 2005 Q1 '06 Q2 '06 Q3 '06 Q4 '06 2006 Q1 '07 Q2 '07 ========= ====== ====== ====== ====== ====== ====== ====== ====== Nokia 264.9m 75.1m 78.4m 88.5m 105.5m 347.5m 91.1m Reports 32.4% 33.2% 33.5% 34.2% 35.7% 34.2% 36.9% 02-Aug --------- ------ ------ ------ ------ ------ ------ ------ ------ Motorola 146.0m 46.1m 51.9m 53.7m 65.7m 217.4m 45.4m ~35.9m¹ 17.9% 20.4% 22.2% 20.7% 22.2% 21.4% 18.4% ~13.3% --------- ------ ------ ------ ------ ------ ------ ------ ------ Samsung 102.9m 29.0m 26.3m 30.7m 32.0m 118.0m 34.8m 37.4m² 12.6% 12.8% 11.2% 11.8% 10.8% 11.6% 14.1% ~13.8% --------- ------ ------ ------ ------ ------ ------ ------ ------ SEricsson 51.1m 13.3m 15.7m 19.8m 26.0m 74.8m 21.8m 24.9m 6.3% 5.9% 6.7% 7.6% 8.8% 7.4% 8.8% ~9.2% --------- ------ ------ ------ ------ ------ ------ ------ ------ LG 54.9m 15.6m 15.3m 16.5m 17.0m 64.4m 15.8m Reports 6.7% 6.9% 6.5% 6.4% 5.8% 6.3% 6.4% 20-Jul --------- ------ ------ ------ ------ ------ ------ ------ ------ Others 197.2m 46.9m 46.4m 49.9m 49.4m 192.6m 38.1m 24.1% 20.7% 19.9% 19.3% 16.7% 19.0% 15.4% 02-Aug ========= ====== ====== ====== ====== ------ ------ ------ ------ Total 817.0m 226.0m 234.0m 259.1m 295.6m 1,014.7m 247.0m ~270.5m³ 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% ========= ====== ====== ====== ====== ====== ------ ------ ------ Growth YoY +20.1% +29.8% +25.0% +22.4% +22.0% +24.7% <11.0% +15.6% ° Strategy Analytics for CY 2005/2006 and Q1'06 through Q1 '07 ¹ Motorola preannounced 35m to 36 million units. Official results on July 19 ² Official by Vendors (Sony Ericsson and Samsung) ³ My preliminary global unit sell-in WA guesstimate (higher than current consensus) Please Note: Shares for Q2'06, Q3'06, and Q1'07 in the above table have been recalulated using total unit sales from Strategy Analytics Quarterly Update abstracts rather than their originally published preliminary estimates delivered by Press Release. See the following post ['Strategy Analytics Housekeeping'] for further detail on this. Key Handset Manufacturers Metrics for Q1 2007¹ Nokia² Motorola Samsung SEricsson LG =========== ========== ========== ========== ========== Revenue (EUR) €8,161 Bil €4.061 Bil €3.491 Bil €2,925 Bil €1.726 Bil Revenue (USD) $10,876 Bil $5.412 Bil $4.652 Bil $3,898 Bil $2.300 Bil Units 91.1m 45.4m 4.8m 21.8m 15.8m Sell-In Share³ 36.9% 18.4% 14.1% 8.8% 6.4% ASP (EUR) €89 €89 €116 €134 €113 ASP (USD) $119 $119 $155 $179 $150 Op. Margin 16.2% -4.8% 13.0% 11.8% 6.6% Op. Profit (EUR) €1.322 Bil Negative €0.485 Bil €0.346 Bil €0.114 Op. Profit (USD) $1.761 Bil Negative $0.646 Bil $0.461 Bil $0.152 · ¹ Currency conversions at Q1 ending March 30, 2007 Interbank rate ² Nokia combines 3 division's handset sales: Mobile Phones, Multimedia, and Enterprise Solutions (which is not all device revenue). ³ Based on Strategy Analytics May 10 estimate of 247m Q1 Sell-In Q2 Summary Reporting to Date with Comparative Q1 and Q2 Key Metrics Samsung: Reported 12-July (USA). Results were a mixed bag. Samsung apparently has knocked Motorola out of the #2 slot in unit share and revenue share this quarter, but it remains to be seen if they gained unit share QoQ, and how long they can retain the #2 slot as Motorola regroups. Unit sales increased QoQ by 2,6 million units (+8% QoQ) to a record high 37.4m units. but unit ASP was down $7 (-5% QoQ), revenue was down 1% QoQ, and margins (and profit) took a big hit (-41% QoQ, -13% YoY). Because of relatively poor and inconsistent performance since emid2004, accentuated by the Won strengthening against the Euro and especially the weak USD, the Telecoms unit management team has been overhauled and its leader, Dr. Steel projects very well. They are focusing more on EMEA and APAC than the Americas where vendors are decimated by operators because of the US distribution model and significantly disadvantaged by forex conversion because of the relative strength of a strong SK Won and pathetically weak US dollar, and on GSM/3GSM (>+75% of their unit sales) than CDMA2000 (still number 2 in CDMA2000 to LG and an important factor in their overall competitiveness) to strengthen unit share, revenue and profitability even as they tentatively stick their toe in the emerging market waters once again. Q1 2007 Q2 2007 Samsung¹ Samsung¹ Growth/Decline ========== ========== =================== Revenue (KRW) w4.280 Tri w4.230 Tri -1% QoQ, +5% YoY Revenue (EUR) €3.491 Bil €3.394 Bil Revenue (USD) $4.652 Bil $4.569 Bil Units 34.8m 37.4m +8% QoQ, +49% YoY Sell-In Share² 14.1% ~13.8% TBD, but probably flat to down ASP (EUR) €116 €112 -3% QoQ ASP (USD) $155 $148 -5% QoQ Op. Margin 13.0% 8.0% -38% QoQ, -1% YoY from 9% Op. Profit (KRW) w0.600 Tri w0.350 Tri -41% QoQ, -13% YoY from w0.410 Tri Op. Profit (EUR) €0.485 Bil €0.281 Bil Op. Profit (USD) $0.646 Bil $0.378 Bil · ¹ Currency conversions at Q1 & Q2 ending Interbank rates. ² Q1 based on Strategy Analytics May 10 estimate of 247m Sell-In. Q2 Estimated. • Samsung Q1 CC Slides here ... sec.co.kr Sony Ericsson: Reported 12-July (USA) and while Sony Ericsson fell somewhat short of market expectations they delivered a very good quarter — significantly better than Samsung's on most growth metrics. They remain solidly in the #4 slot for unit market share and growing revenue share. Like Samsung, ASP was down as they both moved their product range downstream to gain scale. Revenue was up and although operating margin and profit was down QoQ (up YoY) but their profit in Q2 exceeded Samsung's, putting them in the #2 slot behind Nokia, and they are the only other major handset manufacturer retaining double digit margins this quarter. Q1 2007 Q2 2007 SEricsson¹ SEricsson¹ =========== =========== Revenue (EUR) €2,925 Bil €3,112 Bil (+6.4% QoQ, +37% YoY) Revenue (USD) $3,898 Bil $4,189 Bil Units 21.8m 24.9m (+14.2% QoQ, +59% YoY) Sell-In Share³ 8.8% ~9.2% TBD, but up ASP (EUR) €134 €125 (-7% QoQ) ASP (USD) $179 $168 (-6% QoQ) Op. Margin 11.8% 10.1% (-14% QoQ, +13% YoY from 8.9%) Op. Profit (EUR) €0.346 Bil €0.315 Bil (-9 QoQ, +55% YoY from €0.203 Bil) Op. Profit (USD) $0.461 Bil $0.424 Bil · ¹ Currency conversions at Q1 & Q2 ending Interbank rates. ² Q1 based on Strategy Analytics May 10 estimate of 247m Sell-In. Q2 Estimated. • Sony Ericsson Q2 Earnings Release here ... ericsson.com • Sony Ericsson Q2 CC Slides here ... media.corporate-ir.net Motorola: Prereported with another warning on July 11, Moto is a 'wickedly cold' unprecedented and unmitigated disaster in progress: "The company’s shortfall in sales and earnings for the second quarter is primarily attributable to lower overall unit volumes in the Mobile Devices business in Asia and Europe. The company expects second quarter Mobile Devices shipments to be approximately 35 to 36 million handsets. The company’s Mobile Devices business is expected to have a larger operating loss in the second quarter as compared to the first quarter. For the full year 2007, the company no longer expects the Mobile Device business to be profitable." It appears that Moto's quarterly unit market share as well as their revenue share will be the lowest in their history, and there is no indication of when they will return to profitability. They will probably regain 2nd place in unit share on a quarterly basis from Samsung this year, but even that isn't a certainty. It is also not certain that they have yet bottomed. This is a real gift for Nokia. For others also, but Nokia especially. • Motorola's Preliminary Estimates of Second Quarter 2007 Results here ... tinyurl.com Significant Upcoming Earnings Reports for Wireless Sector Leaders • 19-Jul Motorola 2Q 07 results • 20-Jul LG 2Q 07 results (9 PM EDT 19-Jul in USA) • 20-Jul Ericsson 2Q 07 results • 23-Jul Texas Instruments 2007 results • 25-Jul Qualcomm F3Q 07 results • 25-Jul Apple F3Q 07 results • 26-Jul ARM 2Q 07 results • 02-Aug Nokia 2 Q07 results Caveat: The usual applies. I may have inadvertently made (and probably did make) typos, transposition errors, currency conversion errors, or calculation errors, in compiling table data in this post. If anyone spots one, please advise. ### - Eric (IC) -