Nokia's Results -- Key Facts & Analysis

Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):

Nokia Net Rises 43% On Strong High-End Sales

• Summary: Nokia's Q2 results: Revenue up 22% to 9.81 billion euros. Net profit up 43% to 1.14 billion euros (($1.44 billion). 78.4 million cellphones shipped during the quarter, up from 60.8 million a year earlier. Average selling prices declined to 102 euros from 105 due to a shift in mix to low end phones. China revenue up 58%, Asia-Pac up 79%, North America down 13%. Multimedia sales, including high-end phones, up 37% to 1.89 million euros, doubling sales in China and Asia-Pac. Profit margin in Nokia's infrastructure business fell to 7%, the lowest since 2003, due to price pressure in emerging markets.
• Comment on related stocks/ETFs: Nokia's ADRs (NOK) rose 2.9% in late trading last night after the results were announced. The results are now priced-in. Goldman Sachs lowered its EPS estimates for 2006 and 2007 due to the lower margins in the infrastructure business. But this is a long-term trend, as the largest growth opportunity is in emerging markets but competition there is tough, particularly from the Chinese vendors. On the handset side, Nokia needs to bring out a thin handset to compete with Motorola's Razr, but won't be able to at least until Q4. Resources: Nokia's press release, the full Nokia conference call transcript, for comparison -- Motorola's earnings results and conference call transcript, the latest on Samsung's cellphone business.