Nokia Off 16%: Analysts Underwhelmed with Lumia Results Thus Far

Shares of Nokia (NOK) have gone lower and lower as the session has worn on, currently down 79 cents, or almost 16%, at $4.24, as the Street digests the implications of this morning’s warning that Q1 results came in weaker than expected, as handset units and prices were under pressure from rising competition.

Aside from noting the dispiriting struggle of the company’s older handsets, the “Symbian” software-based devices, analysts are generally unimpressed by what the company has achieved thus far with its new line of “Lumia” handsets, developed through its partnership with Microsoft (MSFT):

Scott Thompson, FBR Capital Markets: Reiterates a Market Perform rating, is skeptical about Lumia, writing that sales of the device family of “slightly above 2 million units” in Q1 was “well under FBR and street estimates” and that the “expected Lumia ASP of �220″ was also lower than he’d anticipated. “Management indicated Lumia sales are gaining share across carriers, but we are cautious that Lumia may not gain the momentum to stave off Nokia�s eroding smartphone market share until early 2013.”

Mark McKechnie, ThinkEquity: Reiterates a Hold rating and a $5 price target. He also notes the pricing pressure on Lumia devices and thinks a turnaround will take some time: “We see a prolonged transition as new WP7 phones ramp, Symbian sales decline, and feature phones get displaced by smart phones. We maintain our long-term “stretch” EPS power estimate of �0.50-�0.60 based on NOK achieving strong share of the WP7 market at 7.7% operating margins. Our analysis does not include contribution from tablets and/or notebooks which we suspect NOK will target on the Windows8 platform.”

Charlie Wolf, Needham & Co.: Reiterates a Hold rating. He cut his full-year 2012 EPS estimate to break-even from a prior �0.40 per share. There’s no telling if the Lumia will be a hit, but it could start to help the company in Q3, he writes: “Lumia phones have been launched in 42 markets, according to the company, included a much-heralded launch of the Lumia 900 on AT&T�s network this week. However, Lumia phone sales are unlikely to exceed Symbian sales until the third quarter at the earliest. The gross margin on Lumia phones is far higher than on Symbian phones. So Nokia�s gross and operating margins on smartphone sales should begin to rebound by the third quarter and continue to improve in 2013. We are continuing with our Hold rating because it�s far too early to assess consumers� enthusiasm for the Lumia family.”

Pierre Ferragu, Bernstein Research: Reiterates an Underperform rating on the shares and a $4.29 price target. Nokia seems to have been blindsided by a collapse in the “feature phone” category that the company should have seen coming: “We think Consensus expectations for Nokia�s Mobile Phone division were massively overlooking the fact that the feature phone entered into structural decline in the back end of last year. Nokia shipped 71m Mobile Phone units in 1Q12 at an ASP of �32, vs. our expectations of 80m and �32.” Like FBR’s Thompson, he’s underwhelmed by Lumia thus far: ” Windows phones are meeting very limited consumer traction so far and can at the very best only deliver a slow volume ramp up.�Nokia shipped over 2m (<2.5m) Windows-based smartphone units in 1Q12 at an ASP of �220, vs. our expectations of 3.5m and �270.”

Fin