Through TheFLY's Eyes: Nokia & Siemens

from Theflyonthewall.com









Nokia, Siemens Announce Joint Venture

Nokia (NOK) and Siemens (SI) announced Monday that they will combine their phone equipment units.

The duo expects to realize annual cost savings of $1.9B or E1.5B by 2010, the companies said. Each telecom/mobile giant has come under pressure from increasing high-quality and lower-cost Asian competitors. Nokia and Siemens also face strong competition from duos Alcatel/Lucent and Ericsson/Marconi, as sector players world-wide team-up to achieve greater economies of scale and broader distribution networks, among other operational strengths.

The markets initial response Monday to the announcement was favorable as Siemens shares surged $4.92 to $84.72 and Nokia’s shares rose 26c to $20.23.

Analysts in the Reuters survey expect Nokia in 2006 to register EPS of $1.29 on revenue of $49.6B. They expect Siemens to earn $5.43 on revenue of $112.3B.