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Nokia (NOK) shares have bounced 30% in the past month, after falling off a cliff for most of the second quarter. But, unfortunately for turnaround speculators, Nokia's chances of survival remain slim.

Several months ago, Nokia bulls were banking on the impending Lumia release as a notable positive catalyst. Yet, once again predictions of the next 'iPhone killer' fell flat.

Even with massive subsidiaries and questionable AT&T (T) promotions, the Lumia (Nokia's 'blockbuster' phone) saw virtually no success in Q2.

In the entire quarter, the Lumia shipped just 4 million units. For a quick comparison, Apple's (AAPL) iPhone sales reached a respectable 27 million units in the same period. Keep in mind that the iPhone 4s was released 6 months before the Lumia. Even as a much newer product, Nokia had no luck finding any traction for the Lumia line.

So what's caused Nokia shares to rally 30%? I'd say a solid mix of technicals, and the impending Windows 8 release from Microsoft (MSFT). Nokia's Q2 earnings release, placed emphasis on how the upcoming Windows platform would be "an important catalyst for Lumia."

Is Windows 8 about to rescue Nokia? I doubt it. The operating system has had enough problems of its own, and its potential to provide a boost for Nokia appears to limited.

Initial reviews of Windows 8 have been mixed, but mostly negative. I like to point to this quote "Windows 8 is a catastrophe for everyone in the PC space," by Valve CEO Gabe Newell to sum things up.

Backing Newell, was Activision (ATVI) executive Rob Pardo who said Windows 8 is "not awesome for Blizzard either." It appears Microsoft has already begun to dissuade game makers from its operating system, prior to launch. That's no easy feat.

With our without the success of Windows 8, Nokia will still be in trouble. Earning estimates for 2012 and 2013 are now both negative, and will most likely continue to decline. Even these negative numbers, and seemingly low expectations, are pricing in a big turnaround for Nokia.

Revenue is on pace to fall 26% in 2012, but estimates for 2013 have revenue stabilizing at $36-$37 billion (a decline of about 2% from projected 2012 numbers). Ironically, Nokia's Device and Services revenue (by far its largest segment) fell 26% in Q2 (year over year). Unless Nokia can find a way to stop its plummeting sales, it will have a hard time meeting these projections.

Conclusion

Right now Nokia needs to find a way to boost sales in its worst category, smartphones. Until then, earning estimates will continue to decline and add further downside potential to the stock. Although shares may seem cheap after falling from $7 to $2 in the past year, don't be fooled. Nokia is still valued at almost $10 billion, and they aren't profitable.

Even though Nokia sports an attractive price/sales multiple of .3, that won't last. Sales are falling at an accelerated rate, and margins continue to deteriorate.

Consumer demand for Nokia's products is virtually nonexistent, unless that changes, the stock will continue its descent.

Disclosure: I am long AAPL.

Source: Nokia Still Treading Water, But For How Much Longer?