Microsoft wants Nokia unit to break even by 2016
Print Edition
MICROSOFT Corp said the company aims to get its loss-making Nokia phone unit to break even within two years.
The world’s largest software company reported a 7 percent decline in quarterly profit on Tuesday, chiefly due to incorporating the struggling handset business of the Finnish mobile pioneer.
Microsoft’s chief financial officer told analysts the company plans to take US$1 billion in costs out of the Nokia operation and stop its losses by fiscal 2016, following massive job cuts announced last week.
That cheered Wall Street, which was not expecting such decisive action.
“The expense guidance around Nokia was much better than feared,” said Daniel Ives, an analyst at FBR Capital Markets. “While there is still some heavy lifting ahead, it appears brighter days are on the horizon for Microsoft after a decade of pain and frustration.”
Nokia, which Microsoft bought in April for US$7.2 billion in an attempt to take on Apple Inc and Samsung directly in the fast-growing smartphone market, added almost US$2 billion to Microsoft’s quarterly revenue.
However, it posted an operating loss of US$692 million, including some one-time costs.
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