Nokia's profit impact on Microsoft's acquisition

April 27th, according to foreign media reports, as the transaction of the acquisition of Nokia mobile phone business finally settled, Microsoft now needs to do more than just elaborate plans to integrate and use Nokia's huge mobile phone business, but also need to make it clear that One question is: the impact of trading on profits.

Amy Hood, Microsoft’s chief financial officer, said in a financial analyst’s conference call for the third quarter on Thursday that Microsoft had not fully understood Nokia’s financial information and could not disclose its financial performance expectations. Due to regulatory reasons, Microsoft and Nokia announced plans to officially complete the transaction a few months later.

Hood made the above remarks when answering questions about whether Nokia's business has changed and made Microsoft unable to disclose its performance expectations. "We did not knowingly choose not to disclose Nokia-related performance expectations. We did not obtain enough before the transaction was completed. The data allows us to release financial forecasts as we have done in the past. Nokia uses a different accounting system and needs to be converted into an accounting system that complies with generally accepted accounting principles."

Microsoft understands that this $7.5 billion deal will bring nearly 30,000 employees to it. Nokia Chief Executive Stephen Elop will lead the Microsoft Device Division.

Undoubtedly, Hood discussed with Wall Street analysts on the financial analysts' conference call about the data related to Microsoft's business. The analyst expressed her thanks for her frankness. However, on the issue of Nokia's impact on Microsoft's profitability, Hood took a evasive attitude, saying that current casual expectations do not meet her usual standards. Talking about a business in general, it is not the same thing as providing analysts with specific data that helps you understand business details.

To fully grasp the details of Nokia's business, Wall Street will have to wait a few weeks. So what can we do now?

Nokia said that in the fourth quarter of last year, sales of Lumia series Windows Phone handsets fell. When the transaction plan was announced in September last year, both Microsoft and Nokia emphasized the growth in smartphone sales. However, Nokia said in January that its mobile phone business revenue decreased by 29% year-on-year and fell by 4.5% month-on-month. In 2013, Nokia sold 30 million Lumia mobile phones, far exceeding the 13.3 million in 2012, but far below the target of 50 million Microsoft.

Hood said on the earnings analysts conference call that Nokia’s performance will undoubtedly change in the months following the agreement with Microsoft. She said that Microsoft is still "firmly convinced that it can achieve its intended goal of saving at least $600 million in annual costs within 18 months of completing the transaction."