HP Grinds, Nokia Climbs: Tech Movers
NEW YORK (TheStreet)-- Nokia
According to an article, in The Wall Street Journal, the two companies have made progress a potential deal though discussions recently stuttered. The faltering is partly due to concerns about price and Nokia's slumping position in the market.
The price of the proposed transaction was not disclosed.
The deal would not be a first for the two companies, as they already have a fairly close partnership. Currently, the Espoo, Finland-based company relies on the US software powerhouse for operating-system technology. The Lumia 925, Nokia's newest release, is powered by Windows 8.
The analyst argues that, despite a revenue falloff, share earnings should still see growth. He says in the report, "earnings growth can be driven by a combination of 1) gross margin expansion driven by mix shift to products based on HP-owned IP and 2) a more concerted focus on cost structure alignment to revenue driven, in part, by restructuring." Um adds that "any divestitures would likely accelerate the net debt zero goal and cash that had been used for debt repayment could be used to increase share repurchase/dividends or acquisitions."
Closing prices: NOK closed down nearly 1% to $3.83, MSFT dropped 3.2% to $33.49 and HP ended 2.8% lower at $24.72.
--Written by David Webster in New York
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