Microsoft Corporation (NASDAQ:MSFT) Inherits $452 M Loss Making Hand Set Unit From Nokia Corporation (ADR) (NYSE:NOK)


Dallas, Texas 04/29/2014 (FINANCIALSTRENDS) – With the long drawn out buy out of the mobile hand set business of Nokia by Microsoft Corporation (NASDAQ:MSFT) finally getting completed on 25th April, head honchos at Redmond would be going to the drawing board to rework the strategy they would employ going forward to turn around the prospects of the recently bought out business unit, which reported losses as per the interim 1Q results reported by Finland based Nokia Corporation (ADR) (NYSE:NOK) today.

Interim 1Q Report Released By Nokia Corporation (ADR) (NYSE:NOK) Today

The interim quarter report by Nokia Corporation (ADR) (NYSE:NOK) throws light on the relative strengths in the handset business that Microsoft Corporation (NASDAQ:MSFT) could build on going forward and areas where it might have to take tough call to stop leakage of earnings. The devices & services business unit header under which Nokia used to report its hand set business suffered a huge roughly $452 million loss from operations which generated $2.67 billion revenue in the reporting quarter. This translates into a 10 percent decrease in its net sales in comparison to 1Q13.

Way Forward

The severe losses made by  the hand set unit in the latest quarter forms the back drop in which Microsoft Corporation (NASDAQ:MSFT) assumes full ownership of the division. The decline in sales is being attributed to an overall decline in sales for cell phones. The quarter report does not delve into the relative performance in sales of low end cell phones as against the sales figures of the Windows smart phone. But the innocuous statement in the earnings report which red flagged the issues which will be confronted by Microsoft Corporation (NASDAQ:MSFT) was the reported lack of net sales increase in the smart phone devices segment.

The silver lining from the hand over report for Satya Nadella led management team of Microsoft Corporation (NASDAQ:MSFT) is the fact that the Finish firm reported higher volumes in smart phones accomplished in the reporting quarter in comparison to mobile phone units.