3/7/2023 0 Comments Microsoft nokia writedownThe company is down a fraction in pre-market trading. While Microsoft was expected to both take a write down, and perhaps axe staff, the scale of both is perhaps surprising. “We are moving from a strategy to grow a standalone phone business to a strategy to grow and create a vibrant Windows ecosystem including our first-party device family. In the near-term, we’ll run a more effective and focused phone portfolio while retaining capability for long-term reinvention in mobility,” Nadella added in an email to staff. The staff cuts come on the heels of Microsoft selling part of its Bing team to Uber, and the transfer of 1,200 staffers to AOL as the firm exits the ad business. Microsoft’s CEO, Satya Nadella, said in a public note that he doesn’t “take changes in plans like these lightly,” and that he will host a question and answer session with his denizens tomorrow. The Redmond-based company also recently sacked the former head of Nokia, Stephen Elop, whom it (re)acquired from the Finnish company as part of the original transaction. Microsoft’s phone business has suffered from lower revenue and unit volume than the company originally expected. At the same time, that Microsoft has managed to write down more than the originally announced purchase price of the assets in question is somewhat humorous. The deal with Nokia, originally pegged at $7.2 billion, did not, it seems, take into account certain amounts of cash and intellectual property. The company has also announced 7,800 layoffs “primarily in the phone business”, and a roughly $800 million restructuring charge. Microsoft declined to comment on the number of remaining staffers it employs as a result of the Nokia deal. The firm’s efforts to elbow into first-party hardware have therefore received a massive setback, writing down the vast majority of the purchase price of its phone business. The decline was exacerbated by a temporary bump last year when Microsoft ended support for Windows XP, which resulted in a one-time boost to Windows 7 sales.Microsoft’s signaled and expected goodwill impairment, relating to its previous purchase of the majority of Nokia’s hardware assets, took place this morning - with the software company erasing $7.6 billion from its books. In the quarter through June, Windows revenue fell 22 per cent, hurt by a decline in PC shipments that researchers at IDC pegged at 11.8 per cent globally. The company hopes that better integrating its store into the revamped Start button and powering more Internet searches through Bing will compensate for the temporary dip in Windows revenue. The difficult quarter comes ahead of the launch of Windows 10 on July 29, a free upgrade for users of Windows 7 or 8. The company will continue to make phones on a smaller scale. The writedown was expected after CEO Satya Nadella announced 7,800 job cuts two weeks ago. The software giant posted a net loss of $3.2 billion, or 40 cents per share, reversing a profit of $4.61 billion, or 55 cents per share, a year ago.Īdjusted to exclude the charges, the company posted a quarterly profit of 62 cents per share, beating the average estimate of 15 analysts surveyed by Zacks Investment Research of 31 cents per share. It narrowly beat analysts' depressed expectations for a quarter that also saw a steep decline in personal computer sales even as it prepares to launch its latest operating system, Windows 10. LOS ANGELES - Microsoft booked an $8.4-billion charge in the fourth quarter, swallowing a bitter pill by writing off the Nokia phone business it bought just over a year ago.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |