People aren't buying cell phones, so Nokia Corp.'s (NYSE:NOK) second-quarter earnings, reported Wednesday, were dismal. Net income dropped to 65.5% from a year earlier to €380 million ($536 million), or
€0.10 per share. And while Nokia did beat analysts' expectations of a €361 million profit,
Bloomberg says that didn't prevent Nokia's shares from getting
hammered on Thursday, as MarketWatch reports.
Even so, the earnings call did provide good news of a sort -- by showing why
Nokia Siemens Networks BV, the joint venture Nokia formed with Siemens AG in 2007, looks like a survivor in the infrastructure side of the business, where a brutal consolidation is under way.
Nokia Siemens, readers will recall, is the
stalking-horse bidder for the
CDMA and LTE assets of bankrupt Nortel Networks Corp., with a $650 million bid announced in June. The deal is still subject to the approvals of U.S. Bankruptcy courts.
As that bid shows, there are bargains to be had for those who have access to capital, which Nokia Siemens clearly does. In the second quarter, the JV bolstered its capital structure with a €2 billion syndicated loan involving a group of 21 European banks and a €250 million loan from European Investment Bank for the research and development of a single-base radio station platform.
Nokia Siemens had some other upbeat news to trumpet as well: a €1.1 billion, five-year managed services deal with Oi, a large Brazilian cellular network operator, and a gig building and supplying a voice, video and data services for Time Warner Cable (NYSE:TWC).
Now if the handset business could just pick up a bit. -
Sara Behunek
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Adele Gulfo
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