Ford execs left at a loss

Perhaps Ford Motor Co. can be forgiven for not reacting quickly enough to what it saw in its rearview mirror. After all, when prices at the pump broke records a year ago, that didn’t stop people from buying gas-guzzling SUVs and pickups — the kinds of vehicles that long sustained Ford’s bottom line.

But things have changed.

As they reported a $123 million quarterly loss Thursday — disappointing Wall Street analysts who had forecast a profit — executives at the nation’s second-largest automaker said they knew months ago that high gas prices would eventually force consumers to migrate toward more fuel-efficient cars and crossovers. They just didn’t think it would happen so soon.

“We did anticipate that the world would not remain static and that things like crossovers and cars would actually play a bigger role in the industry’s future, and, therefore, we planned them to play a bigger role in our future,” Chairman and Chief Executive Officer Bill Ford told the Associated Press in a telephone interview.

“It’s just that the speed at which this happened — over one quarter — we didn’t foresee that.”

Ford’s president of the Americas, Mark Fields, didn’t hide his frustration, saying he wished he could buy “a better crystal ball.”

The company said it would accelerate the restructuring efforts it began in January and would announce new measures within two months.

“Microsoft Corp. said Thursday that fiscal fourth-quarter earnings fell nearly 24 percent in part because of a one-time legal charge but still beat Wall Street estimates.

The software maker also announced a somewhat unusual $20 billion stock buyback program aimed at returning some of its cash back to shareholders.

Microsoft shares fell 55 cents or 2.4 percent to close at $22.85 Thursday on the Nasdaq Stock Market ahead of the income report. In after-hours trading, the stock gained $1.37, or 6 percent.

For the three months ended June 30, the software maker reported earnings of $2.83 billion, or 28 cents per share, compared with $3.7 billion, or 34 cents per share in the same period last year.

“Computer chip maker Advanced Micro Devices Inc.’s second-quarter profit rose sharply but sales dipped as it struggled amid the aggressive price cuts of larger rival Intel Corp.

For the three months ended July 2, AMD earned $88.8 million, or 18 cents per share, up from $11.3 million, or 3 cents per share, in the same quarter of 2005. Revenue was $1.22 billion, down from $1.26 billion last year, the company said Thursday.

Last year’s profit was depressed by its unprofitable flash memory business, which was spun off late last year.

Analysts surveyed by Thomson Financial expected AMD to report, on average, earnings of 22 cents per share on $1.25 billion in revenue.

“Continental Airlines on Thursday added to the airline industry’s apparent turnaround from years of struggles by nearly doubling its second-quarter net income through higher fares and packed planes.

The nation’s fifth-largest carrier reported a 98 percent jump in second-quarter net income as a 23 percent boost in passenger revenue helped offset higher fuel prices and a hefty accrual for employee profit sharing.

Helane Becker, an analyst with The Benchmark Company, agreed. She said fare hikes prompted by soaring fuel prices have stuck as customers keep coming in the summer flying season.

“Safeway Inc. beat analysts’ earnings expectations for the second quarter and raised its outlook for the remainder of the year, providing the strongest indication yet that the nation’s third-largest grocer has finally recovered from years of labor strife and sales erosion. Its shares surged to a 52-week high on Thursday’s news.

The Pleasanton, Calif.-based company said it made $246.2 million, or 55 cents per share, in the three months ended June 17. That represented an 84 percent increase from net income of $134 million, or 30 cents per share, at the same time last year.

This most recent quarter’s results included a $58.5 million lift from interest earned on a previously announced income tax refund.

Without that one-time boost, Safeway said it would have earned 42 cents per share — a figure that topped the average estimate of 36 cents among analysts polled by Thomson Financial.

“Continued strong demand drove Union Pacific Corp.’s second-quarter profit 67 percent higher than last year, the nation’s largest railroad said Thursday.

Union Pacific said it earned $390 million, or $1.44 per share, during the period that ended June 30. Last year the railroad earned $233 million, or 88 cents per share, during the same quarter.

The railroad also generated a company record $3.92 billion in revenue during the quarter, up 17 percent from $3.34 billion last year. Last year’s second-quarter results were weighed down by derailments on coal lines in Wyoming in May 2005, but Union Pacific chief executive Jim Young said he still thinks this year’s earnings growth is significant.