Happy Friday friends, it’s been quite the week. Today in this post we will focus on three stories, keeping ourselves light as this entry is a bit late today.
Microsoft + Dell
All Killer, No Filler
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Microsoft may provide up to $3 billion in mezzanine funding to a purchase of Dell, providing bridge cash to help the transaction close.
This would, theoretically, allow Microsoft to pick up a stake in the company as it heads private. What Microsoft would want with such a percentage is not hard to parse: as the company walks further into the OEM jungle, having a big cat on its side wouldn’t be a negative.
Dell remains a behemoth in the PC space, if one that hasn’t exactly kept pace to market transitions.
Microsoft in fact has two key incentives to participate in a Dell deal, assuming that the move would help the long-term health of the company: having a stronger Dell would help it sell more copies of Windows, and Dell has a deep pool of industrial design talent – even if it appears to often go untapped – that the company could employ in its own efforts.
Microsoft building laptops? The only sillier idea than that that I have heard recently was the rumor that the company had an eye on building a tablet. Hogwash.
Microsoft met revenue expectations, and slightly bested earnings per share expectations in its second quarter of its fiscal 2013.
In case you missed the key points, here are the brass tacks from Microsoft’s quarterly report:
[R]evenue of $21.46 billion, and earnings per share of $0.76. Analysts had expected revenue of $21.6 billion, and earnings per share of $0.75.
For the quarter, Microsoft had operating income of $7.77 billion, and net income of $6.38 billion.
The company stated that the Windows division posted strong results, up 24% from the year-ago period, to $5.88 billion. However, after adjusting for “net deferral of revenue for the Windows Upgrade Offer and the recognition of the previously deferred revenue from Windows 8 Pre-sales,” the increase is a more modest 11% gain.
The company remains cash rich, with strong revenues from a broad swath of industries. The real unknown for the quarter was Windows revenues, which ended up besting expectations.
For the rough count, Microsoft is firing on all cylinders. There is some macroeconomic headwind that is keeping growth constrained, but the company has successfully rebooted a great number of its products and kept its revenue and profit on track.
The firm is healthy.
And now for fun, the following clip. Microsoft is hard at work rebuilding the Internet Explorer brand by noodling about its past, noting former weaknesses.
Watch the video, and then go outside.
Sip an IPA and go hug someone you love. Top Image Credit: ToddABishop