Merrill Lynch analyst says Nokia’s 4Q results will be disappointing
By Stefan Constantinescu on Thursday, January 4th, 2007 at 3:40 PM PST In Financial/Corporate News
Sandeep Malhorta, an analyst with Merrill Lynch in London, today warned that Nokia (NYSE: NOK)’s (NOK) fourth quarter results, due on January 25, could prove disappointing. He writes that the quarter “should have been a blockbuster, but probably won’t be.â€
On the one hand, Malhorta notes that Nokia should have its first quarter with more than 100 million handsets sold – he sees 107 million units, up 21% sequentially and 28% year-over-year. But Malhorta says the company’s bottom line will be hurt by strong shipments to emerging markets, a lack of “a stylish mid range†phone and softer high-end multimedia sales. The result: eroding average selling prices and lower margins. Malhorta sees the company’s average selling price dropping to 90 Euros in the quarter, from 93 in the third quarter, with gross margins for mobile phones dropping to 27% from 27.4% one quarter earlier. Malhorta is looking for revenue of 2.3 billion Euros in the quarter, and an operating margin of 16.2%, which compares to the consensus view of 2.5 billion Euros and 17.7%.
Nokia today is down 4 cents at $20.62.
Source: Tech Trader Daily
Well it isn’t over until the fat lady sings, 3 weeks to go until we find out if his prediction is true or not.
Also, just staring at the average sale price is not the whole story. All the low end devices are sold with a profit, and that’s what matters. However, she is certainly right that the mid-range is still not what it should be, and N-series sales are not as high as hoped by Nokia. Wonder if 2007 will finally bring them back to form in the mid-range too?
The mid range is what kills it, if your going to spend that much on a phone you might as well save for another month and buy the higher end models. I think that’s the mentality people are taking.
There is no “bargin” phone in the sense that there is a cheaper device that does most of what the more expensive devices do.