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Nokia adds to post-earnings gains following upgrade, HTC court win

  • Nokia (NOK +2%) has made fresh 52-week highs today, and is up 13% since delivering market-pleasing Q3 results and Q4 guidance yesterday morning. A two-notch upgrade to Buy from Denmark's Danske Bank is helping Nokia's cause; Danske issued a similar upgrade in April before having a change of heart.
  • Meanwhile, a U.K. court has ruled in Nokia's favor in a patent infringement case against HTC. The ruling follows a favorable U.S. ITC verdict against HTC in September. With Nokia set to no longer sell hardware for which it needs patent cross-licenses, the company is bound to become more aggressive in its IP licensing efforts.
  • Also: Evercore and Cowen have each reiterated neutral ratings following the Q3 report. Evercore likes positioning and balance sheet in the wake of the Microsoft deal, but also calls NSN "a weak #2 player" in a competitive mobile infrastructure market. The firm estimates NSN has a 15% mobile infrastructure share, half that of market leader Ericsson (ERIC +0.7%).
  • Cowen is more upbeat, arguing NSN could post again post a double-digit op. margin in 2014, and that the division's strong LTE positioning could allow it to deliver top-line growth next year.
Comments (8)
  • Seppo Sahrakorpi
    , contributor
    Comments (1871) | Send Message
     
    More details on the HTC case here:
    http://on.mktw.net/Hsqeqq
    30 Oct 2013, 01:03 PM Reply Like
  • beyond dreams
    , contributor
    Comments (185) | Send Message
     
    Seppo,
    Just wanted to thank you for the excellent and well thought out comments. You make a significant contribution to us all. Your comments have also made me rethink a couple times and have made me money.

     

    Thanks again.
    30 Oct 2013, 01:32 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1871) | Send Message
     
    @bd Thanks, I am happy to hear if my commentary has been helpful.

     

    On that note, here's Foss' longer write up / analysis on the HTC case:
    http://bit.ly/18Dyt8r

     

    "...I've been saying for a long time that HTC will end up paying royalties to Nokia for a license to some of Nokia's non-standard-essential patents (it already has a SEP license). It's been defending itself vigorously and effectively so far, but its own assertions against Nokia are not going to give it leverage. It's only a matter of time before a tipping point is reached, and Nokia made major headway today in the most difficult court in the world for plaintiffs, the England and Wales High Court...."
    30 Oct 2013, 04:17 PM Reply Like
  • Seppo Sahrakorpi
    , contributor
    Comments (1871) | Send Message
     
    Moreover:

     

    "...All of this means a lot of pressure, and I say it again, HTC will inevitably end up paying. As will Samsung, with which Nokia has been negotiating for some time and which it may have to sue at some point...."
    30 Oct 2013, 04:23 PM Reply Like
  • dwdallam
    , contributor
    Comments (6630) | Send Message
     
    Seppo,

     

    Are you kidding? Everyone that knows anything about Nokia reads all of your comments. Indispensable information.
    30 Oct 2013, 06:05 PM Reply Like
  • ewmpsi
    , contributor
    Comments (1412) | Send Message
     
    If we get a deal, and Nokia becomes cash rich because of the deal and stops bleeding money post deal; then you get the real upgrade (credit rating).
    30 Oct 2013, 03:06 PM Reply Like
  • dwdallam
    , contributor
    Comments (6630) | Send Message
     
    "calls NSN "a weak #2 player" "

     

    I wonder if they were the #1 leader if they would still be 'weak.'

     

    Some of these comments just don't make sense. Nokia is the #2 player, period. That's an accomplishment in itself. but I could see Nokia becoming the #1 player with a strong first position, and the analyst would say something like:

     

    "Although Nokia is the #1 player with a strong balance sheet and an upside of 300%, and with their buyout of Ericsson, almost no competition, there are a lot of variables out there and anything can happen, like a rouge meteorite hitting Finland. Given that, we're downgrading Nokia to sell with a price target of $4.50."

     

    That stuff just gets really old, especially when they are out of alignment with their peers.
    30 Oct 2013, 06:04 PM Reply Like
  • ewmpsi
    , contributor
    Comments (1412) | Send Message
     
    Thanks Seppo!

     

    $NOK Press release: Mobile broadband ace NSN wins Sprint deal for large-scale TDD LTE roll-out http://bit.ly/1dPcwv6
    30 Oct 2013, 06:08 PM Reply Like
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