I have been away on vacation when these two blew up a hole in my investments.  I came back home last night.  This is the second time "this year" I have been on vacation and something terrible happens with my holdings!!!  I am two for two, and I will be traveling again on August 20th, just hope I don't have a threepeet (sp?).

First, INFN: wow what a disaster of a quarter this current one will be.  I am totally baffled.  yet, it appears as if MKM had it right.  More right than management obviously.  I say obviously because the open market purchases that management did in early May were sizable and they could not have known what MKM knew, IMO.

I read a bit of the Q&A from the CC transcript and this is what I got from it, at least the relevant info, according to management and my interpretation of it, some, reading between the lines, so take it for what it’s worth:

1.- Some customers are delaying DTN-X orders, waiting for the release of their next Gen equipment that will include the Infinity Engine.  I am unclear when this happens, is that part of the issue??

2.- Intense competition in the Data Center Interconnect.  I think it may be Huawei, but not certain.

3.- The customer that stopped ordering the Transmode is not yet back.  Is it gone for good??

 

Nokia:

It missed on the top line, and at first it appeared as if it also missed on the bottom line, although some articles make It sound as if it met the bottom line expectations, but who knows! 

While the stock dropped in Pre-market, it closed the day at a bit better level than the worst price in pre-market. Maybe I am grasping at straws but I tend to think this is an indication that NOK is as low as it is going to go??? Market permitting of course.  I am still fearful of a market correction, which would force these two holding even lower???

But I digress, the announcement of cost savings of $1.2B is no surprise to me, ALU was a bloated pig, and the fact that both organizations had a substantial engineering/sales/management departments in the Wireless division, make this something to be expected.  My belief is that Suri is likely to extract as much as $1.4B when it is all said and done.  He will dribble these news overtime.  I have arrived at this number from reading BofA’s report.  BofA’s bullish target states $1.8B, their baseline target is $1.2B, which appears to now be in the bag.  BofA has pretty much been the most accurate of reports I have come across, therefore I give it a higher weight than others which seemed to have missed the mark on both cost savings in synergies and the patent revenue numbers for the Technology Division.

 

The silver lining for NOK is that both the additional cost savings from synergies and the additional revenue from the Technologies division (gained from the extended patent deal with Samsung), start to kick in, in the third quarter and should continue on in following years.