Nokia weighs down Microsoft's Q1 profit by 13 percent

Microsoft on Thursday reported its first-quarter earnings which showed the share value at 54 cents per share, down 13 percent from 62 cents per share a year ago.

However, sales rose to 23.2 billion dollars, up 25 percent from the same time last year.

A major factor to the company's performance this quarter is Finnish handset maker Nokia, which Microsoft acquired in April for more than 7.2 billion dollars. The phone hardware division has grown since Microsoft brought Nokia's Lumia line of smartphones into the fold, and Microsoft hopes it will help boost the popularity of Windows products and services across the board. But the acquisition has come with costly layoffs and high operating costs, CNET reported.

However, Nokia helped the smartphone division notch better than expected revenue this quarter at 2.6 billion dollar in sales, but it cost the company 1.14 billion dollar in severance packages and other restructuring costs and sustained its drag on profit.

Meanwhile, Microsoft expects an additional 500 million dollar in restructuring costs, which will bring the total charges in line with projections Microsoft laid out in July, the report said.