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Summary:

In April, Nokia introduced disappointing numbers but revealed strong industry growth. Specifically, Moto later came out and blew away its numbers. Stock price appreciation = 30% in two days! Same story is going on in 2Q04, but it is even more pronounced! The difference in unit […]

In April, Nokia introduced disappointing numbers but revealed strong industry growth. Specifically, Moto later came out and blew away its numbers. Stock price appreciation = 30% in two days! Same story is going on in 2Q04, but it is even more pronounced! The difference in unit volume growth for Nokia was 11% while industry growth was 45%. Sony-Ericsson (#5 player) released this morning and even confirmed the strong industry growth. Nokia & SNE are predicting over 600M units sold for the year (2004). This is a revision upwards! Disregarding this, the stocks sold off including Motorola. Greg Gorbatenko of Marquis Investment Research points out in his research report that Motorola may have shipped 39.5 million handsets this quarter.

Using the slightly declined ASP of $150, you would expect PCS revenues to be $5.928B. Adding this to the core biz grown at the guided rate ($4.42B), you get overall revenue of $10.348B.
With guidance at about $8.4B and consensus at $8.5B, we say MOT is poised to crush their numbers once again. Even if we are slightly wrong, the difference between this analysis and consensus is big enough to justify a pop in the stock if we are even close to being right, which we are quite confident that we are. I guess living right next to MOT headquarters keeps them on the front of my mind. :-)

  1. Where does he come up with that number? They shipped 22.4 million phones in Q4 of 2003, they shipped 25.3 million phones in Q1 of 2004 and now they are going to essentially double the number of phones they ship to 39.5 million? Seems a bit implausable.

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  2. well i did not get his complete report. so i am confused. i have emailed him and see what i get. anyway it seems that motorola has started shipping new PCS/CDMA handsets and that’s where the upside is going to come from.

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  3. Let’s also consider Samsung’s numbers – which were great. Samsung shipped 22.7 million units in 2Q, up from 20.1 million in 1Q. So the most, I believe, we could expect is maybe a 10-15% uptick? 40-50% seems even more far out based on Samsung’s numbers….and those guys make great phones.

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  4. Packetologist Monday, July 19, 2004

    Moto’s phones are selling well but I do not believe they are going to “crush” the numbers. June was a slow month for the CE industry. Also, if Motorola did inded have a “blow-out” quarter they may “deffer” some revenues to Q3

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