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Microsoft: Mr. Acquisitive?

John Paczkowski — Mon, 11 May 2009 18:58:48 +0000

With $25 billion in its coffers, Microsoft isn’t exactly hurting for cash. So why is the company planning a bond offering that could raise billions in additional capital? Microsoft (MSFT) won’t say, exactly. “The company is not in need of financing,” a spokesperson explained in a statement. “It is taking advantage of good market conditions and Microsoft’s great credit rating,” adding that proceeds from the sale of the notes will be used for “general corporate purposes.” Those include working capital and share buybacks. They also include acquisitions, which, as investor Eric Jackson notes, the company could use more of.

And this is certainly a good time to buy. “To be successful in the long run, Microsoft needs people to green-light the best acquisitions and teams of people with the right skill sets to integrate them,” Jackson writes. “Frankly, Microsoft hasn’t shown it has either of those abilities. Microsoft investors don’t need another expensive aQuantive deal or Facebook investment that smacks of desperation and has questionable long-term value for the company’s shareholders. It needs to take a page out of IBM’s and Oracle’s playbook, though, and start doing deals to grow its top and bottom lines. A big debt issuance, with a skilled acquisition team, and evidence of some exciting growth-related deals could suddenly show the market that this elephant can dance again.”

Motorola to 400 Employees: Looks Like We, Heh-Heh, Forgot to Fire You

John Paczkowski — Wed, 31 Dec 2008 21:44:53 +0000

Earlier this year, Motorola (MOT) said it would sack 1,500 employees during the fourth quarter of 2008. Apparently, that was a mistake.

What it meant to say was that it planned to sack 1,900 employees during the fourth quarter of 2008, as evidenced today by the company’s announcement that it will lay off 400 more employees than originally expected this year. It should be noted, though, that these positions are part of the cost cutting actions previously announced in October.

“On December 23, 2008, the Company approved certain additional plans relating to these cost-reduction initiatives,” Motorola said in an SEC filing. “These additional actions, plus other actions approved since October 30, 2008, relate to the termination of approximately 400 employees, resulting in additional pre-tax severance charges of approximately $25 million in the fourth quarter of 2008.”

What a nasty shock for those 400 employees who thought their jobs would survive through to the new year, eh? The elimination of their positions brings the total number of employees laid off at Motorola to about 12,000 since the beginning of 2007. 2009 isn’t looking too promising for the struggling handset maker, which is already heading into the new year with a junk credit rating amid a chorus of analyst skepticism.

Insert Motorola "GONR" Joke Here

John Paczkowski — Tue, 09 Dec 2008 22:29:38 +0000

If Motorola were a Greek tragedy, we’d be at that point in the narrative where the company is just about to blind itself out of grief–with a pair of RAZRs, of course. Two reports issued today show an already grim scenario for Motorola growing markedly worse. The first, from MultiMedia Intelligence, shows the company’s share of the handset market in rapid decline, with Samsung and LG poised to surpass it. The second, from Thomas Weisel Partners, suggests Motorola’s 2008 and 2009 revenues will come in well below expectations. How far below? Analyst Matthew Sheerin cut his 2009 estimate for the company from a profit of three cents to a loss of 18 cents.

“We believe demand has deteriorated across most of the company’s core end-markets, with a particularly sharp slowdown in handsets, evidenced by a number of key supplier and competitor pre-announcements,” Sheerin wrote in a note to clients. “[The economic downturn] will make a recovery in the core handset business even more challenging and could accelerate cash burn.”

More ugly news for Motorola (MOT), which last week had its credit rating slashed to Junk by Standard & Poor’s.

S&P Announces Motorola JNKR

John Paczkowski — Sat, 06 Dec 2008 00:01:30 +0000

Today brought with it nasty news for Motorola. Standard & Poor’s slashed its corporate credit rating on the long-suffering handset maker, noting that the company’s troubled mobile business is likely to continue what is already a two-year downward slide. “Revenues and profits in the first part of the year will be challenged by a narrower, somewhat-dated product portfolio,” S&P’s Bruce Hyman said in a statement. “Standard & Poor’s also expects about 10 percent fewer handsets to be sold worldwide in 2009 at lower average prices than in 2008.”

An ugly blow for Motorola (MOT). With the economy in a deadspin and stronger rivals like Nokia (NOK) lowering handset sale expectations, things are looking decidedly bleak for the company.