Microsoft Corporation (MSFT): Was Acquiring Nokia the Right Decision?

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Microsoft Corporation (NASDAQ:MSFT) declared its fourth quarter results on July 22. The company’s revenue for the quarter amounted to $23.38 billion, compared to $19.9 billion it posted for the same quarter, last year. The earnings per share declined to $0.55, from $0.59 it posted last year. The most important thing to note in the results was the impact on earnings and revenue from Nokia Corporation (ADR) (NYSE:NOK)’s phone business that Microsoft acquired, which the company reported for the first time. Instead of adding up to the company’s EPS, which most analysts on the Street were expecting, the phone business shaved off $0.08 from Microsoft Corporation (NASDAQ:MSFT)’s fourth quarter earnings per share.

Microsoft Corporation (NASDAQ:MSFT)

Microsoft Corporation (NASDAQ:MSFT) also announced that it would be laying off 18,000 workers, which along with its fourth quarter results was the subject for discussion among Christian Magoon, the CEO of YieldShares, Brian Bradshaw, a Portfolio Manager at BP Capital, and Larry Shover, the CIO of SFG Alternatives, on Fox Business News.

“So, obviously, it’s not good, but I think in the broad context, when you look at the size of the overall economy. This is a limited number of these types of announcements. I think by and large you are creating as many jobs now as you have in a long-long time […]  I would be a little more inclined to talk about the general ramifications of it rather than Microsoft specifically. I don’t think there is a big read through,” Bradshaw said.

Mr. Shover feels Microsoft Corporation (NASDAQ:MSFT) can turn around Nokia and the goals that it was acquired for can be accomplished, because it has been done earlier by other companies and Microsoft Corporation (NASDAQ:MSFT) can do it too. He added that Microsoft Corporation (NASDAQ:MSFT)’s investors are looking for capital allocation, the company is sitting on piles of cash, offshore, and the investors are interested in what the company is going to do with it, like dividends or buyback.

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