We can clearly recall the Microsoft’s acquisition of Nokia. It is considered to be among the biggest acquisitions in that time. The deal costs Microsoft a total of $7.9 billion. The company has a great expectation and sees a good potential for Nokia and that was why they decided to purchase the company.
Microsoft reported revenue of $1.4 billion for this quarter. This might be good enough for some. However, the truth is that the company lost more or less 12 cents for each mobile phone sold. The reason for this is that the costs of sales surpassed the revenue by as much as $4 million. The loss can even be much bigger if you would put marketing and other expenses in consideration.
The company hinted the investors that there is a probability of writing off some of their Nokia acquisition when going ahead. According to Microsoft, the Phone Hardware reporting unit is currently at a heightened risk of impairment considering its performance. In cases like this one, the company should make sure to balance the accounts. They can take charge against their earnings for the purpose of compensating for their performance.
However, on Thursday, Microsoft did a conference call and it did not mention anything about the write off. Instead, it mentions that they are making great efforts to lessen costs in their division.