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Monday, 15 July 2013 10:30

Nokia faces testing time

Written by Fuad Abazovic

Investors to review company’s chances

Investors are expected to work out if the end is near for Nokia and its Chief Executive Stephen Elop cunning plan to turn around the company. Investors will be scrutinizing second-quarter results to see whether there's enough cash to stay with a turnaround plan which Elop said would take two years but is now into its third. 

Elop dumped Symbian in a move to adopt Microsoft untested Windows Phone software. The move has not paid off, yet. Analysts expect this week’s results to show a steep fall in handset shipments, led by a drop in sales of regular mobile phones as consumers switch to smartphones and cheaper models from Asian rivals. This could mean that Nokia could be the target of a takeover in fact Microsoft has been named as a potential buyer.

The company's sensible decision to buy Siemens stake in their joint venture Nokia Siemens Networks might also cost the outfit too much. Analysts are going to look at Nokia’s cash flow to see if there could be some other buyers. Nokia earlier this month estimated its net cash position at the end of the second quarter was between $4.8 billion and 4.2 billion. This meant that it burned through between 300 million euros and 800 million in the quarter.

Most see the acquisition of Siemens' NSN stake positively saying the price was cheap and NSN's is making lots of dosh. Weak handset shipments could prompt a sell-off in Nokia shares, which have risen over 20 per cent in the past quarter on hopes of a buyout and enthusiasm over new handsets.

Last modified on Monday, 15 July 2013 10:52

Fuad Abazovic

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