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Windows turnaround helps Microsoft top forecasts. An unexpected 4% increase in revenue from Microsoft's (MSFT) Windows division helped the company beat consensus in FQ3, with revenue climbing 6% to $17.41B despite EPS slipping to $0.60 from $0.61. There were solid performances at the Office and Server & Tools businesses, but Entertainment & Devices slumped 16% and online Services (Bing) remained a cash sinkhole. Read this next >> SA author Sol Palha on why Microsoft is among his "five growth candidates."

GE profit grows but revenues fall. GE (GE) is yet another company to beat earnings expectations as Q1 EPS jumped 17%, excluding items, to $0.34 even as revenue fell 8% to $35.2B. A 12% decline at GE Capital helped offset a 14% increase at the conglomerate's Industrial segment. Shares were +0.6% premarket.

Ex-Citigroup chairman: Glass-Steagall repeal led to crisis. "To some extent what we saw in the 2007, 2008 crash was the result of the throwing off of Glass-Steagall." That's not from an Occupy Wall Street protestor but from Richard Parsons, who's just ended his term as Citigroup (C) Chairman and was on its board for 16 years, including when it was Citicorp. "Why didn’t he do something about it when he had a chance to?" asks CLSA analyst Mike Mayo analyst. Quite. (Bloomberg)

Top Equities News
Vodafone could benefit from C&W's £5.2B "capital loss." Cable & Wireless Worldwide has extended the deadline for Vodafone (VOD) to make a bid for the U.K. company from yesterday until Monday amid reports of a huge possible tax benefit. Aside from gaining C&W's fixed-line network, Vodafone could also enjoy a £5.2B "capital loss" that is in theory permanently available to C&W to reduce the tax payable on U.K. profits. (FT, BBC)

Google drops heavy hint of Pinterest interest. Google (GOOG) M&A chief David Lawee has bolstered speculation that his company will make a bid for Pinterest by calling the white-hot bulletin board site "extraordinary," and capable of helping Google with what he calls "the most challenging problem" faced by the company: the discovery of video content. Despite YouTube's phenomenal growth, its discovery mechanisms are viewed as a weak spot. (Business Insider)

Samsung breaches ceasefire with Apple before it's begun. Samsung (OTC:SSNLF) has filed another IP suit against Apple (AAPL), just a day after the two companies were ordered by a federal judge to hold settlement talks. The lawsuit claims Apple violated eight patents. (Bloomberg)

Freescale CEO to retire as losses grow. Freescale Semiconductor (FSL) CEO Rich Beyer, who has held the job since 2008, plans to retire, the company said yesterday at the same time as reporting that its Q1 losses per share widened to $0.04 from $0.02 while revenue fell 6.2% to $950M. Freescale also gave revenue guidance of $975M-$1.025B vs. consensus of $1.02B.

Banks face yet another probe. The Consumer Financial Protection Bureau is investigating nine leading banks over their overdraft protection programs and the justifications for the size of their overdraft charges, Bloomberg reports. The inquiry, which is taking in the usual suspects, such as JPMorgan (JPM), Wells Fargo (WFC) and Bank of America (BAC), could be another threat to a major source of income.

Judge limits Lehman claims vs. JP Morgan. Bankruptcy Judge James Peck has narrowed Lehman's $8.6B lawsuit against JPMorgan (JPM), saying "safe harbor" rules mean Lehman can't recover various sums transferred to JPMorgan in August and September 2008. The case may one day "help to define what constitutes acceptable conduct by major financial institutions during times of crisis," Judge Peck wrote.

Russia to charge BP JV over oil spills. Moscow will bring charges against TNK-BP (BP) over damages caused by oil spills in Siberia. Russian officials said BP's Russian oil venture had 784 accidents in its Siberian pipeline last year, while oil peers had experienced only 20-30 a year.

Top Economic & Other News
Voters set to dump Sarkozy. France is due to hold a Presidential election on Sunday, with polls showing that the left-wing Francois Hollande is likely to beat Nicolas Sarkozy but only after a run-off. Hollande has pledged to renegotiate the EU fiscal compact to tilt it away from austerity and towards growth, putting him on a collision course with Angela Merkel and providing the potential for further market chaos. Read this next >> SA contributor Marc Chandler on the importance of the French election to the eurozone.

German firms continue to look on the bright side of life. Monty Python would be proud: the eurozone is being pulled back into the vortex of its debt crisis - Spanish 10-year bond yields have topped 6% again - but German businesses continue to remain upbeat, with the German April Ifo index edging up to 109.9 from 109.8 in March vs. expectations of 109.5. (Reuters)

State revenues recover. Tax income at the state level has finally returned to its pre-recession peak and probably continued growing at the beginning of this year, a Rockefeller Institute report says. Overall state tax revenues increased 3.6% on year in Q4 2011, and were 3% higher than in Q4 2007 and 7.4% better than in Q4 2008.

Three Breakfast Reads
Will Apple Be Helped Or Hurt By Facebook?
SA Readers Appear To Favor Yielding Securities
You Need To Know About Digital Domain

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Today's Markets:
In Asia, Japan -0.3%. Hong Kong +0.1%. China +1.2%. India flat.
In Europe, at midday, London +0.2%. Paris +0.5%. Frankfurt +1.0%.
Futures at 7:00: Dow +0.5%. S&P +0.5%. Nasdaq +0.5%. Crude +0.8% to $103.10. Gold +0.2% to $1645.00.

Friday's economic calendar:
No events scheduled.

Earnings Results:
For full real-time earnings coverage, please click here.

Companies that beat EPS expectations last night and today include:
- Advanced Micro Devices (AMD)
- Capital One (COF)
- Chubb (CB)
- Freescale Semiconductor (FSL)
- Hanesbrands (HBI)
- Kimberly-Clark (KMB)
- Ingersoll-Rand (IR

Companies that missed expectations include:
- SanDisk (SNDK)

Notable earnings before Friday's open: AEP, BPOP, CP, GE, HON, IR, JCI, KMB, MCD, RCL, SLB

More:

Source: Wall Street Breakfast: Must-Know News