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The Disconnect Between Microsoft and Nokia

Stocks in this article: NOKMSFTAAPL



Still, its products are not challenging the leaders in the smartphone sector, Apple (AAPL) and Samsung Electronics.

Nokia Chairman and acting CEO Risto Siilasmaa should have described the fourth quarter as a swan song instead of a watershed for the company, which is now composed of the smaller divisions or, as I call it, "the leftovers" after the Microsoft deal closes. He said the company continues to expect the Microsoft deal to "significantly improve Nokia's earnings profile."

Good news for Nokia's shareholders. But how about Microsoft shares?

MSFT actually closed up a little on Thursday to $36.06, but -- and this is a big "but" -- the stock popped by 3% in after-hours trading following the news it reported a fiscal second-quarter profit of $6.56 billion, or 78 cents a share, compared with a profit of $6.38 billion, or 76 cents a share, for the year-earlier period.

Revenue rose to $24.52 billion from $21.46 billion. Analysts polled by FactSet on average were expecting the company to report a profit of 68 cents a share on revenue of $23.67 billion, so this was an unexpectedly pleasant upside surprise in both these financial categories. Thirty minutes after the closing bell, MSFT shares were trading around $37.24, up $1.18 from the day's closing price.

The one-year chart for MSFT is looking pretty good already. When all the facts about the fourth quarter 2013 financial results are factored in this chart will look even better.

MSFT Chart
MSFT
data by YCharts

The company's 14% sales growth and other positive announcements should help secure its sustainable 3%-plus dividend and the upside prospects for MSFT's share price.

This is especially good news in the light of Nokia's dismal fourth-quarter results. Nothing like a good contradiction between the acquired and the acquirer.

At the time of publication the author had positions in AAPL and MSFT but had no positions in the other companies mentioned in this article.



This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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Marc Courtenay is the founder and owner of Advanced Investor Technologies, LLC, as well as the publisher and editor of www.ChecktheMarkets.com.

Courtenay holds a Master's of Science degree in Psychology from California Polytechnic State University, and is a former senior vice-president of Investments for two major brokerage firms. He's been a fiercely independent investment "investigator" and a consulting contributor to the investment publishing world for over 30 years. In addition to his role as an investment publisher and analyst, he serves as a marketing consultant to the investment media industries.

In his role as a financial writer and editor, he specializes in unique investment strategies, growth with income stocks, overlooked investment themes, tax-advantaged themes, risk management, technologies to capture gains and reduce losses, real estate related opportunities,effective wealth preservation techniques, and the use of ETFs for diversification and asset allocation. He also follows and frequently writes about technology, health sciences, energy and resource companies. Because of his training and background in Clinical Counseling and Psychology, he enjoys writing about investor behavior, the herd mentality, how to turn investment mistakes into investment breakthroughs and the stock market's behavioral trends and patterns.
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