Analysts are not too optimistic about Nokia
Corporation (ADR)(NYSE:NOK)’s performance as shares traded up 1.4% this morning
before tomorrow’s third-quarter earnings. Sanford Bernstein’s Pierre Ferragu has rated the stock as
“Underperform” stated 40% higher losses are expected in 3rd quarter.
Lumia shipments might be around 2 million in spite of predictions of 3 million.
Lower-end smartphones from Nokia might do well initially, but does not stand a
chance against Android’s low end.
Ferragu further predicts a cash burn of €750
million, although it is tough to call on a quarter. A progressive targeted ramp
up of Lumia will lower estimates in the 4th quarter; guidance in
last quarter is weak. Overall, 2013, as of now, does not look too bright for
Nokia.
Cowen & Co.’s Matthew Hoffman once again rated
the Nokia stock as Underperform. He feels there will be tremendous top-line
pressure in the Devices & Services (D&S) business and
an EPS loss in-line with consensus. The 4th quarter might see a
slight increase in Lumia shipments and ASPs, due to the anticipation of the
Windows 8 platform. Lumia Windows Phone 8 launches might solve immediate issues
faced by D&S section, but it is not enough to resolve structural deficits
in the long run.
UBS mentioned that Nokia will not have it easy in
the smartphone market and RBC is positive that the company will lose share in
the Microsoft network.
Shares of NOK have shown solid pre-earnings rally
and rose all the way from $2.56 to $2.94 this week, gain of about 15%. Today,
the stock was up 4.26% at $2.92.
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