Microsoft Corporation: Impact Of Nokia Handset Unit On Its Earnings

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Microsoft Corporation: Impact Of Nokia Handset Unit On Its Earnings

Ever since Microsoft Corporation (NASDAQ:MSFT) completed the acquisition of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s device and handset business, investors have been confused about the integration and the software giant’s long-term strategy. Microsoft provided little details during its third quarter conference call. Now, Sterne Agee analysts Robert Breza and Jean-Baptiste Jouve have assessed the impact of Nokia’s handset business on Microsoft’s revenues and earnings.

New handset business to reduce Microsoft’s earnings by 12 cents

In a research note dated June 30, Sterne Agee said that it has reduced its FY2015 EPS estimate by 12 cents and FY2016 estimates by 6 cents. The research firm has a Neutral rating on the stock with $40 price target. Microsoft paid about $7.5 billion for Nokia’s devices and services unit. It is an addition to the Redmond-based company’s “well-performing consumer hardware segment.”

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