Microsoft Corp. made an official statement yesterday, revealing that its profit for the fiscal fourth quarter was negatively affected by the acquisition of the mobile unit of Nokia Oyj. However, the company also shared that it benefited from the increasing corporate demand for computers and software delivered online.
One of the analysts, who work at FBR Capital Markets & Co. – Mr. Daniel Ives commented on the companys statement for Bloomberg: “Nokia continues to be the black cloud over Microsoft. This is the first quarter before the cost cuts. That’s why Nadella took the ax out.”
According to the statement of Microsoft Corp., the purchase of Nokia led to a 7.1% fall in the companys net income, which amounted to 4.61 billion dollars, or 55 cents per share during the three months ended June 30th. The result turned out to be lower than the 60-cent net profit that was expected by analysts. Microsofts profit excluding Nokia-related items and taxes was 66 cents per share, surpassing the analysts projection of 64 cents apiece.
The U.S.-based company bought the handset unit of Nokia in April this year in a deal valued at more than 7 billion dollars. The Chief Executive Officer of the company – Mr. Satya Nadella was forced to undertake the largest workforce reduction in Microsofts history by eliminating 18 000 jobs, 12 500 of which in the newly-acquired Nokia unit, in order to neutralize the losses from the acquisition.
“Satya has taken a number of exciting steps both to reposition the company and to energize it,” Microsoft Chief Financial Officer Amy Hood said in a Bloomberg interview, referring to the purchase of the Nokia unit.
Microsoft Corp. was 0.01% down to close at 44.83 dollars per share yesterday, marking a one-year change of +40.05%. According to the information published on CNN Money, the 27 analysts offering 12-month price forecasts for Microsoft Corp. have a median target of 44.00, with a high estimate of 54.00 and a low estimate of 34.00. The median estimate represents a -1.85% decrease from the last price of 44.83.
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