High-End Handsets Driving Nokia Revenue And Margins

Forbes.com reports that Piper Jaffray analyst T. Michael Walkley is raising his price target for Nokia (nyse: NOK) after it's strong quarterly earnings. Walkley said, "Nokia noted solid handset trends, with particularly strong share gains in Latin America, Middle East, Africa and China offsetting share declines in Europe."

He also noted that the "company is seeing strong demand for WCDMA handsets," and believed the company "increased its leadership share." Walkley said, "With Nokia's growing share of WCDMA handsets that we believe carry above corporate average operating margins combined with our belief the WCDMA handset market doubles in 2006, we believe this will contribute to gradual improvement in Nokia's handset operating margins."

Walkley came away impressed "with Nokia's overall mix of higher-end products which led to a higher average selling price." He said, "Nokia noted its higher inventory entering the second quarter and its planned increase in marketing for the second quarter were due to its strong pipeline of new products the company is launching in the upcoming months. We believe Nokia continues to improve its mid-tier and high-tier product portfolio and the new products will help support strong operating margins."