July 19, 2013 in Business

Microsoft earnings short of expectations

From Wire Reports
 

Microsoft reported fourth-quarter earnings of an adjusted 66 cents per share on $19.90 billion in revenue, well short of the 75 cents and $20.72 billion expected by analysts. The company booked a $900 million charge to cover the steep price cut on its Surface RT tablets, which it announced Sunday.

Google’s second-quarter earnings and revenue fell below analyst forecasts, partly because the Internet search leader’s ad prices took an unexpected turn for the worse. The problem is linked to the rising usage of smartphones and tablets, whose smaller display screens so far have commanded lower ad rates than for marketing pitches delivered on personal computers. The results announced Thursday revealed that Google’s average ad rate, or “cost per click,” fell by 6 percent from last year. It marks Google’s seventh consecutive quarter of declining ad prices. Google’s stock fell by about 4 percent in extended trading.

AutoNation, the country’s largest car dealership chain, made optimistic predictions for the next year as its second-quarter earnings rose 14 percent on strong growth in all of its business units. Mike Jackson, CEO of the Fort Lauderdale, Fla., company, said the fundamentals are in place for continued auto sales growth in the next year, and that means more strong quarterly earnings for his company. AutoNation’s net income was $89.9 million, or 73 cents per share, for the April-June quarter. That compares with earnings of $78.6 million, or 64 cents per share, a year earlier. Revenue grew 13 percent to $4.43 billion on strong sales of new and used cars as well as parts and service and finance and insurance growth.

Union Pacific Corp. increased rates enough to record a 10 percent jump in second-quarter profit, but railroad officials offered a cautious outlook on the economy. Railroad CEO Jack Koraleski said the economy appeared weaker in the second quarter than it did at the beginning of the year, so he’s not sure how much growth to expect. The company generated $1.11 billion in net income, or $2.37 per share, in the quarter that ended June 30. That’s up from $1 billion, or $2.10 per share, in the same months last year. Revenue rose 5 percent, to $5.47 billion.

• Grocery store chain Safeway Inc. said Thursday its profit fell in the second quarter, partly on a tax charge related to a deal to sell its Canadian operations. For the period ended June 15, net income fell to $8.4 million, or 3 cents per share. That compares with net income of $122.7 million, or 51 cents per share, a year ago. Adjusted for one-time items, including a 44-cents-per-share tax charge, increased legal reserves, a gain on the sale of investments, and other items, net income totaled 51 cents per share. Analysts expected 50 cents per share, according to FactSet. Revenue fell nearly 2 percent to $8.7 billion from $8.83 billion.


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