What Nokia's Net Sales Tells Us? Stock Analysis

After everything collapsed, one superhero called Microsoft came and change life from darkness to brightness. Not really it happened like that but more or less it was a true story. And now, Microsoft published that on new launch Nokia phones, there will be no Nokia logo. Perhaps this will affect positively and negatively to the company but now they are trying to rising from the ashes. (Like Blackberry)

In Q3 Reports they announced Financial Reports and Net Sales by Geographical Area. Of course, analyzing financial reports can give us more or less about current status and future about stocks. However, in this article I will mainly focus on Nokia's Net Sale Growth and how it will affect the future.

Why Nokia failed? For me Nokia failed because they ignored the US Market and they focused more on Europe and Asia. Of course, it was not so logical to ignore the world biggest market . So, Did Nokia reborn in US Market's after Microsoft? They are increasing. But only increased in US Market can save them?

                                         

Let's look at Q3 of 2011 on the table above,  Nokia's net sale is total 5392 EUR million. As can be seen in the table, mostly Nokia's bazaar was Europe, China and Asia-Pacific. Nokia's North America earning is 6 times less than Latin America. (where Nokia has second less earning) In 2012, Nokia's total net sale dropped from 5392 to 3563 which is -%34.  Specially there is a big difference in China which is more than -%75 and In North America, earnings dropped sharply which is %51 percent. This is mostly because at 2012, Apple launched Iphone 5 to the market. And it affects negatively to earnings of Nokia in China and North America which is leaders for Iphone demand.

When we come to today more closer, in Q3 2013 total earnings from Q3 2012 to Q3 2013 decreased from 3,563 to 2591. But despite the fact that, Asia-Pacific, Europe and Middle East & Africa earnings dropped sharply, US Market earnings increased from 36 to 299 which is more than %200 growth. But, still increased in US Market couldn't save Nokia's earnings from sharp falling.

                                       

In 2014, net sales increased from 2591 to 2940 and increased it's earnings almost every Region except Asia-Pacific and Latin America (but they are only -%1 and -%4 percent so nothing to worry.) But still it is much less than 2011.

Despite the fact that, Nokia has the second biggest market share in Smart Phone Industry after Samsung, Nokia's earnings are less then Apple which is in 3rd position. This is because the difference between the prices perhaps.

And also, year by year Nokia's market share is getting smaller and smaller which is not good for future of the stock. As I mentioned above, Nokia was aiming mostly to Europe,China and Asia Pacific regions and not USA, After merged with Microsoft, things got changed and yes, Nokia gain more earnings in USA than before but this time Nokia lost it's castles which are Europe,China (hugely) and Asia Pacific.

In conclusion, there is improvements but I don't see any reason why people are so exciting about Nokia stock nowadays. It will be between $7 to $9 as usual, people who think Nokia's stocks will be more than $10 is just dreaming because logically it is impossible to reach that level at least for now. I don't want to be pessimistic, but we should not expect more stuff from future of Nokia than current situation.