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

To: Rob Preuss who wrote (4919)	5/14/2007 1:58:50 PM
From: Eric L	Read Replies (1) \| Respond to of 9255

Today's Positive Surprise: Implications ... Hi Rob, << I placed a limit order to sell at $25.84/sh just after ex-dividend day. Today it was triggered at $26.16/sh. I'm pleased by today's share price rise (and my sale) but wondering about the traditional Summer slump in NOK shares that I've heard about... Does today's share price action reflect a "last gasp" before the slump or does it mean we'll skip the slump this Summer? Opinions wanted. >> I think you made a sensible move by placing a limit sell when you did, and it's always nice to have a limit sell hit above what it was placed at. I gave my opinion on the general subject of NOK price action here a week or so ago ... With the Motorola bad news and Nokia good news behind us and dividend about to be paid. I'd expect NOK to trade broadly in line with the NASDAQ Index in coming months, and I'd expect a retreat from today's levels before long. That said, there's nothing but good news ahead. Q2 earnings should be better than Q1. Q3's better than Q2, and Nokia will rock'n'roll in Q4 as they always do, but accentuated this year with a full product line refresh across all tiers and in various stages of ramping. Message 23520560 I think it was rather predictable that Nokia would increase share in Q2, but it was a surprise to me that Nokia not only announced a potential upside surprise to their conservative Q2 guidance but did it this early in the quarter. Nokia will not be announcing Q2 earnings for another 2½ months (August 2nd), somewhat later than normal. The share increase oriented upside surprise announcement was amplified by positive comments by Nokia CFO, Rick Simonson today at Reuters Global Technology, Media and Telecoms Summit in New York ... "This isn't a trade-off between market share and profitability. It would be silly to push in additional products by dropping prices. That wouldn't make any sense, so basically, we've been pricing our products on a normal basis, normal as they go through their life cycle." That product range "life cycle" includes several new products with high appeal that started to ramp last quarter and more that will start to ramp this quarter, in all price tiers and Nokia's product range is already the healthiest it's been in several years, with more coming on stream shortly. When asked last month by CNBC if the Enterprise Solutions Group would turn to the black in the first half as the company promised earlier Rick replied "We've significantly reduced our operating losses in the (first) quarter, and did much better than analysts had expected," adding that Nokia expects the unit to break even in the second quarter of 2007. It might even show a profit. On the downside Simonson also said last week he expects significant restructuring charges in the second quarter from the start-up of Nokia's mobile networks joint venture with German's Siemens and an an increase in marketing costs as it spends more to promote new products ... "We have a number of key new products hitting the markets in the next few months and we expect to see an appropriate increase in marketing expenses to really support these launches." Nokia should also, however, receive good, positive visibility for the next month. They are participating in several high visibility broker sponsored events ... • May 30: Lehman Brothers Worldwide Wireless and Wireline Conference 2007 • June 1: Sanford C. Bernstein Strategic Decisions Conference 2007 (New York) • June 6: Merrill Lynch, Telecom, Media, Technology Conference (London) • June 12: Bear Stearns 18th Technology/Communications/Internet Conference 2007 (New York) • June 13: Exane BNP Paribas, European Seminar (Paris) I'd also expect at least one more Nokia product announcement no later than June end. At a minimum we'll probably see the HEDGE/FI enabled N81 and N82 formally announced in splashy fashion at a Nokia sponsored event. There is one more potential surprise ahead. In the next few weeks Gartner should be announcing their estimates of Q1 2007 sell-through. I think it is highly likely that their sell through share will exceed their sell-in share. That could produce a positive bounce. All of the above is net positive for NOK. The bottom line is that NOK and NOK1V share price could hold up somewhat better than I anticipated even if we see the seasonal tech swoon I anticipate. I've been planning to add some NOK if it dipped to near $21. I may have to make that $22 or better since I'm expecting a very positive finish to this year. I'm more bullish on NOK near to medium term prospects than I've been since the H! 2004 crash. I'll be watching NOK very closely between now and end of July. Best, - Eric -