Nokia: Q1 Average Selling Price For Handsets Above Forecast (NOK, MOT, ERICY)

Apr.11.06 | About: Nokia Corporation (NOK)

Nokia (NYSE:NOK) is trading up about 4% today following its report that average selling prices for Q1 handsets came in above forecasts. Reuters:

ASPs in the quarter were 103 euros ($124.8), up from its own forecast of at best 99 euros, but down from 110 euros a year earlier. The ASP for the fourth quarter was 99 euros.

Sell-side analysts had a mixed reaction in notes to clients. Richard Windsor at Nomura Securities said it bodes well for the remainder of the year, but doesn't address the key question mark at Nokia:

If Nokia has problems, it has always been in the first quarter, and then it recovers towards the end of the year. If the first quarter is good, it's a good omen for the rest of the year... Nokia's problems are largely based on the enterprise business. I haven't got an indication that it has recovered.

Piper Jaffray analyst T. Michael Walkley wrote:

We expect the improving product portfolio could have a positive impact on margins throughout the course of 2006... (Nokia's) mix of low-end phones was lower than expected due to better sales of mid-end products and some aggressive pricing by competitors in some emerging markets that Nokia decided not to match.

Interesting to note that Motorola Inc. (MOT) is up only 1% on the news -- Motorola is much less exposed to Nokia's European/international market. LM Ericsson (ERICY) is actually trading down so far on the day.

NOK 1-yr chart: