Nokia (NOK) shares are sagging badly ahead of the company’s fourth quarter earnings report due Thursday morning.
Credit Suisse analyst Kulbinder Garcha this morning cut his 2009 handset industry sell-in forecast to down 10%, from down 6% previously. Citing expectations of continued inventory reductions in the industry, he cut his 2009 EPS estimate to 74 Euro cents, from 87 cents. For Q4, he now sees the industry selling 319 million unis, flat sequentially, but up 10% year over year. He expects Nokia’s unit sales in the quarter to be 115 million units, down 2% sequentially and down 14% year over year. For the quarter, he sees Nokia posting revenue of 12.9 billion Euros and profits of 25 Euro cents a share, below the Street at 13 billion and 27 Euro cents. Garcha also cut his estimates on Ericsson (ERIC), citing his reduced handset forecast.
RBC Capital’s Mark Sue wrote this morning that he expects “generally subdued results” for the fourth quarter, and contends the company could cut its dividend in half as a cost savings measure. Sue thinks Q4 revenue could be “modestly” below the consensus, and says ASPs could be modestly below the previous quarter level of 72 Euros.
Morgan Keegan’s Tavis Mccourt this morning wrote that a survey of mobile handset pricing found that the average price for a smartphone has fallen about 5% over the last week, driven by discounts in particular at Sprint (S) and Verizon Wireless (VZ, VOD). He also said that overall handset units in 2009 are likely to be closer to down 10% than the down 5% estimate Nokia previously provided.
NOK today is down $1.04, or 7.4%, to $12.97.
Ericsson shares are down 61 cents, or 8.4%, to $6.62.
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