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Microsoft Profits Fall By Buying Nokia

Microsoft Corp beat forecasts on Tuesday to report a jump of 17 percent of their income, but profits fell 7 percent due to the costs of incorporating the business phone from Nokia to its structure.

Shares of the world’s largest software company, which this week hit record highs of 14, rose 0.3 percent in after-hours operations, as revealed by Reuters.

“This result is good enough for the market and is another step in the right direction,” said FBR Capital Markets analyst Daniel Ives. “Nokia was slightly worse than expected, but that’s not entirely surprising given the great challenges facing the business growth,” he added.

Nokia bought by Microsoft this year to fight Apple Inc and Samsung in the booming smartphone market, added almost 2,000 million dollars to Microsoft quarterly revenue but recorded an operating loss of 692 million dollars, which included several extraordinary costs.

The line of Nokia Lumia smartphones, but received good reviews, it has not been successful as Microsoft hoped, capturing no more than 4 percent of the global market.

Its sales reached 5.8 million units in the nine weeks of the quarter in which Nokia was part of Microsoft. That compares with sales of 35.2 million iPhone in the quarter.

Cut workforce

Microsoft is in the midst of a process to drastically reduce the operation of Nokia, closing some plants and cutting a workforce of 25,000 employees to about half, in their quest to control costs and shifting to cloud computing from a plan released last week by its new CEO, Satya Nadella week.

The company reported quarterly earnings of $ 4,610 million, or 55 cents per share, compared with 4,960 million, or 59 cents per share, in the same period last year.

The market average expected a profit of 60 cents per share, although it is unclear how analysts calculated the performance and cost of integrating the operation of Nokia, which became part of Microsoft in late April.

Quarterly revenue rose 17 percent to 23.380 billion, above the average of analysts’ estimates, calculated by 23,000 million, mainly due to additional sales of Nokia.

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