Microsoft stock lifted by Nokia profit pledge
Redmond CFO’s two-year plan for end of losses boosts after-hours trading
Microsoft saw an after-hours rise in its stock price following its pledge to lift its recently acquired Nokia devices business into the black within two years, Reuters reported.
Redmond recorded a 7% drop in quarterly profit yesterday, which it attributed largely to the absorption of Nokia operation, a former OEM partner for Microsoft.
Microsoft's chief financial officer pledged a $1bn cost reduction in the Nokia unit and an end to losses by June 2016. Microsoft last week announced record job cuts of 18,000, 12,500 of which will reportedly come from overlap in roles from the integration of ex-Nokia personnel.
The Nokia purchase was a $7.2bn gamble that a Redmond in control of hardware, platform and ecosystem, can turn the tide in the global smartphone war with Apple, Samsung and Google. Currently, Microsoft's mobile OS, Windows Phone, represents a meagre 4% of the market, despite critical acclaim for the company's flagship Nokia Lumia smartphones.
Following the announcement of cuts, investors see a brighter future for Microsoft. Over the past week, shares have hit 14-year highs and were up 1.1% at $45.33 after hours.