Wells Fargo Comments on Nokia (NOK) Q2 Results

July 18, 2013 8:14 AM EDT
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Wells Fargo today maintained a Market Perform rating on Nokia (NYSE: NOK) with a price target of $3.50-$4.00. Comments follow Nokia Q2 results, which showed revenues of EUR5.7B, which was below consensus of EUR6.6B.

Analyst Maynard Um said, "Breakeven non-IFRS EPS was better than our estimate of –EUR0.03. The upside to earnings was mainly due to better NSN profitability (gross margins 38.3% vs. our 32.0% estimate and operating margins of 11.8% vs. our 7.3% estimate)."

"Devices & Services (D&S) revenues were soft. D&S revenues of EUR2.7 were EUR274MM lower than our estimate of EUR3.0. The decline was mainly due to significantly lower ASPs vs. our expectations. Device units were essentially in line with the good news that channel inventory was normal (on an absolute basis, decreased seq) and gross margin of 24.4% slightly above our 24% forecast – key metrics to watch for on demand. Outlook: The operating margin outlook of negative 2% +/- 4% points may be viewed as disappointing but note that it is identical guidance from the last two quarters. Sales are expected to be higher seq," he added.

For an analyst ratings summary and ratings history on Nokia (NYSE: NOK) click here. For more ratings news on Nokia click here.

Shares of Nokia closed at $4.04 yesterday.

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