Barron's adds more color to the NOK upgrade by GS:

 

12:02 PM ET

Nokia Rising: Cost Cuts and Synergies Underestimated, Says Goldman Sachs By Tiernan Ray

Shares of Nokia (NOK) are up 12 cents, or 2%, at $5.66, after Goldman Sachs’s Alexander Duval raised his rating on the shares to Buy from Neutral, with a $6.30 price target, writing that the company is “about to enter its mostintensive cost-cutting phase and management has historically shown itself adept at delivering efficiencies,” which should boost profits above Street expectations.

Nokia shares are down 27% this year, he writes — he’s referring to the ordinary shares traded in Helsinki, with ticker “NOKIA.HE,” in part because of a weaker-than-expected outlook for its main “Networks” business. He thinks this is too much, given Nokia has “limited EU macro correlation,” and given margins have already reset.

“We note consensus for FY16 Networks EBIT has fallen by 16% and group EBIT has fallen by 21% i.e. a significant earnings reset since the start of the year,” writes Duval.

Duval also raises his estimates for the “synergies” the company will obtain through its acquisition of Alcatel, writing “Nokia has already stated it can achieve >€0.9 bn in synergies by 2018, and our updated analysis suggests it can achieve €1.15 bn.”

Duval’s estimate for this year’s networks division revenue goes to €23.06 billion from €22.977 billion, thanks to higher mobile networks revenue. His Ebitda for the division goes to €2.4 billion from €2.376 billion. For next year, he goes to €23.737 from €23.65 billion in revenue, and to €3.185 billion in Ebitda from €2.97 billion.

lt cap,

Thans for all the news. I wouldn't have caught that in my own news survey, most every day. I don't know much about how Cisco's winning that large customer contract, and former (I guess) INFN customer impacts INFN. But choosing a 'solution' other than the DTN-X, which I think I remember is their main 'disruptive tech' creation doesn't sound so great. It would be interesting if they had analyzed whethr this is a one-off for a specific situation, and whether DTN-X is still the best solution for the majority of clients in that segment of networking. I suppose the CC will have to address that, I'd think. It sure was tempting in the $10's, and may be here above $11. But there being several significant issues to be clarified, I'll probably go the route you said you preferred some time ago, which was waiting to see how the CC played out, hopefully giving better guidance and clarity. The sector still seems to be out of favor, in terms of price movements, compared to the rest of the market. Well, except if you're in oil :-)

CSCO has a more complete solution, certainly.  They bring Switching, Routing, Security and Servers to the cloud. Infinera can't compete against that as they only bring the Optical gear for Data Center Interconnect, Metro and Long Haul

lt cap,

I'm likely asking technical questions without being technically competent in this area. But in the areas you said that INFN's products were aimed at/appropriate for - Data Center Interconnect (ah! I finally get the DCI talk), Metro, and Long Haul - Are those areas of competition with Cisco, and if so, is the equipment that INFN brings + supplemental equipment from other sources that are needed competitive with CSCO's all-in-one solution, or does Cisco eat their lunch. I think it's probably not a terribly bright question, as if it were true that CSCO bettered INFN in INFN's main areas, INFN wouldn't be much of a company. I'd think the better questions would be to ask how much 'overlap' in business there is between CSCO and INFN, and which company has an advantage edge over the other? I suspect it's not that simple - there are likely multiple factors in any given company's situation - starting with price/performance - that would factor into who to go with. But the more I learn about these things, the better I understand what's going on.  In the beginning, I thought Light Reading would be far too technical to understand, but I find the articles mostly comprehensible, informative, and interesting.

Unfortunately I am not familiar with CSCO's optical gear, I was under the impression that they did not play in that segment (pure optical) in the same way as INFN or Ciena do, so this came as a surprise.  That said, CSCO's routers do have optical interfaces but the boxes are far more expensive that simply buying a pure optical box. 

I would assume that CSCO offered a one stop shop solution which included all the gear, security, management software and service contract.  

From the LightReading article:

"Now we have Cisco engineers on site for four days a week as part of the relationship"

This is a very powerful reason to go with a vendor that basically offers a one stop shop + on site folks to assist should there be any problems.  IBM used to (probably still does) put someone on site when a mainframe + service contract were sold.

lt cap,

So, is Cisco's deal like buying an Nvidia GTX 1080, and getting a free game? 'Buy Cisco hardware, get a free engineer?" 

The market is making me crazy today. NOK looks like a bargain, having been upped within the last week at Goldman to 'buy', and today's slide is tempting, despite the fact that I own too much already by a ton or more.  INFN below 11 looks charming. But I understand that Brexit is probably weighing on NOK, as there are fears that the wheels are coming off the train in Europe - today's news is full of things that haven't been mentioned in a long time - Italy's banks are in trouble, etc. If the EU comes apart, as has been predicted by a number of sooth sayers for a long time, I'm sure all hell will break loose. And on the 27th, we'll find out about INFN - which Jeffries raised to 'buy' about a month ago with an 18 PT.

I'm unsure whether this is a buying opp, at least for a trade,  or I'd best sit on my hands.

One thing I'm more sure of is this: While it doesn't begin to cover all (pc) sins, INTC's R and D seems to have come somewhat to its rescue: (I understand, I'm out of my area of expertise, but still), the memory that INTC developed jointly with Micron is reported to be 1,000 times as fast as today's SSD NAND memory, and will likely be a revolution the way the switch from mechanical drives to Nand storage was. And INTC can, to a degree, do whatever they want to with the patent - altho there are some indications that INTC is playing in a very proprietary way, and may in fact have products that are rivaled by what Micron does with sharing those patents. While I don't think there are commercial products available just yet (I *think* 3D point is going to be intel's name for their products), it shouldn't be too long before there are. Owning next-gen (and a huge leap) memory is kind of like being Rambus way back when - if you license it, you don't have to actually produce anything to keeps a huge stream of revs incoming. As I said, I think INTC wants to be proprietary and keep their products at the top of the heap, but we'll see. 

I think it has somewhat brightened INTC's propsects. We'll see.

And the super rich play by different rules - FBI recommends no charges (cough, cough) against Hilary.

And the county prosecutor declined to file charges against Edsel Ford II for beating on his wife in Grosse Point, MI.

The volatility in both NOK and INFN is crazy high.  Sure hope INFN does not throw us a bomb.  INFN's volume is very low today, but Beta is high!!  It just seems that the punishment is overdone.

lt cap,

INFN - you'd think, you'd think this is overdone. It's why I'm considering wading in. But the low for the 52 weeks is $10.11, as you know. And the prospects of $9's recently had a real chance. If it wasn't for the economic environment, (and I'd *think* that INFN has lots of global exposure), once again I have to ask: Why isn't someone buying them out at this dirt-cheap price where the fit is logical?  We've talked about that for so long. It's a fire sale. No buyers? Hmm.

Agree, one would think that Fallon would be getting calls from interested buyers.  But no word on that, not even rumors!