Business

Google’s Q1 profits up 31 percent

Google Inc. tweaked its online advertising formula and expanded its business outside the United States to produce a first-quarter profit that surpassed analysts’ predictions, alleviating some of the economic worries battering its stock this year.

The Internet search leader said it earned $1.31 billion, or $4.12 per share, during the first three months of the year. That represented a 31 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007.

First-quarter revenue totaled $5.19 billion, up 42 percent from $3.66 billion a year ago.

After subtracting the commissions paid to the company’s advertising partners, Google’s revenue stood at $3.7 billion – about $100 million above analyst estimates.

“High fuel costs that helped drive some marginal airlines into bankruptcy this spring are also taking a toll on two of the nation’s healthiest carriers.

Continental Airlines Inc. slid to a first-quarter loss as fuel spending soared 53 percent, and Southwest Airlines Co. – which hasn’t lost money since 1991 – saw its profit fall by two-thirds.

Both airlines say they will respond by slowing their once-ambitious growth plans, and they are raising fares.

Southwest reported Thursday that its earnings tumbled to $34 million, or 5 cents per share, in the January-March period, from $93 million, or 12 cents per share, a year earlier. Revenue rose 15 percent, to $2.53 billion.

At Continental, fuel costs rose by $364 million from last year, pushing the Houston-based carrier to a loss of $80 million, or 81 cents per share. A year ago, the company earned $22 million, or 21 cents per share. Continental also posted a healthy increase in revenue – up 12.3 percent to $3.57 billion. But costs rose even faster, by 16.7 percent.

“The grocer Supervalu said fourth-quarter profits jumped 30 percent.

Supervalu became one of the nation’s largest grocers with its 2006 acquisition of most Albertsons grocery stores.

Retail sales declined slightly to $8.1 billion because of store closures. Sales at stores open at least a year were flat. Still, Supervalu Inc. profits for the quarter that ended Feb. 23 rose to $156 million, or 73 cents per share, from $120 million, or 57 cents per share, in the year-ago quarter. The company said it earned 77 cents per share excluding acquisition costs. Revenue climbed less than 1 percent to $10.39 billion, from $10.3 billion.

Harley-Davidson Inc., which has been slowing down for the past few years, has hit a serious rough patch as even its upwardly mobile customer base thinks twice about dropping thousands of dollars on a classic motorcycle.

Chief executive Jim Ziemer said Harley-Davidson has had temporary production cuts over the past four years, but the hundreds of layoffs announced Thursday are the first of that magnitude in two decades.

Expectations for the rest of the year are not good. The Milwaukee-based company cut its guidance for 2008, saying it expects earnings to decline by 15 percent to 20 percent. Previously it predicted growth of as much as 7 percent.

Net income for the quarter ended March 30 was down 2.5 percent to $187.6 million, or 79 cents per share, compared with a profit of $192.3 million, or 74 cents per share, a year ago. Revenue increased 10.8 percent to $1.31 billion from $1.18 billion a year ago.

Merrill Lynch & Co., the world’s largest brokerage, on Thursday said it would cut another 3,000 jobs after more than $6.5 billion of fresh write-downs pushed it to a loss for the first quarter.

It marks the third straight quarterly loss for Merrill amid a global credit crisis that began last summer. Banks and brokerages have racked up nearly $200 billion of write-downs to date, with more feared to come.

John Thain, hired as chief executive four months ago to clean up the firm’s books, cautioned that things were unlikely to improve in the next couple quarters.

Merrill Lynch lost $2.14 billion, or $2.19 per share, after paying preferred dividends, during the first quarter. This was well below the profit of $2.11 billion, or $2.26 per share, a year earlier. Total revenue fell to $2.93 billion from $9.6 billion a year earlier.



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