Markets & Finance

Raymond James Downgrades Nokia

Nokia (NOK) posted lower-than-expected second-quarter net profit. Raymong James downgraded the stock.

Analyst Todd Koffman says he downgrades to underperform from outperform based on renewed price pressure. He says handset average selling prices (ASPs) at the company are declining in the mid-teens on sequential basis. He says this is severely crimping margins and offsetting reasonably healthy unit shipment growth.

Koffman notes the quarter was modestly below estimates and its third-quarter guidance was disappointing. He believes the company's problems reflect its unusually high exposure to emerging markets and competition from Motorola (MOT), which now appears interested in taking these underserved markets. As such, he thinks Nokia's margin structure and market share remains at risk.

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