Date
27 March 2017
The acquisition of Nokia's handset business has proved costly for Microsoft. Photo: Bloomberg
The acquisition of Nokia's handset business has proved costly for Microsoft. Photo: Bloomberg

Microsoft posts record loss after Nokia writedown

Microsoft Corp. reported Tuesday a US$3.2 billion loss for the three months to June due to huge writedowns related to the purchase of Nokia’s handset business.

It marked the company’s largest-ever quarterly net loss, Bloomberg News noted.

Microsoft announced earlier this month that it was taking a US$7.5 billion charge on the Nokia mobile phone business.

The software giant acquired Nokia’s phone unit in April last year for US$9.5 billion. The deal proved to be a flop as Microsoft’s smartphone business continued to lose money.

Sales fell 5.1 percent in the June quarter to US$22.2 billion. Excluding the Nokia charge and costs related to job cuts, profit was 62 cents a share in the June quarter.

Earnings were reduced by a total of US$8.4 billion in charges, including the writedown of the Nokia purchase and restructuring charges related to job cuts and other integration efforts, the report said.

Although revenue from Microsoft’s cloud-computing business rose on growth in the Azure and Office 365 programs, the gains were overshadowed by the Nokia-related writedown, the report said.

Sales of Windows to PC makers to pre-install on machines dropped 22 percent.

The company’s shares fell 3.9 percent in after-hours trading following the quarterly results announcement.

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FL/RC

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