Earnings roundup: Microsoft overcomes charge

Microsoft Corp.’s fiscal fourth-quarter profit edged up 7 percent despite a hefty charge to cover the cost of defective Xbox 360 video game consoles.

The world’s largest software maker said Thursday its earnings for the three months ended June 30 climbed to $3.04 billion, or 31 cents per share, from $2.83 billion, or 28 cents per share, during the same period last year.

Results were weighed down by a charge of $1.06 billion, or 8 cents per share, related to the video game console repairs.

In early July, the company said it would extend the warranty on the Xbox 360 to three years after too many succumbed to “general hardware failure,” a vague condition marked by flashing red lights on the front of the console. The software maker said it has fixed problems in the manufacturing process but would not give details.

Excluding this charge, Microsoft would have earned 39 cents per share, in line with Wall Street’s expectations, according to Thomson Financial.

Revenue climbed 13 percent to $13.37 billion from $11.80 billion last year, just ahead of Wall Street’s estimate of $13.27 billion in sales.

“Google Inc.’s second-quarter profit climbed 28 percent, but it wasn’t enough to fulfill Wall Street’s high expectations for the Internet’s search leader.

Investors quickly expressed their dismay, causing Google shares to plunge by nearly 8 percent after the results were released Thursday.

The Mountain View-based company earned $925.1 million, or $2.93 per share, during the three months ended in June. That compared with net income of $721.1 million, or $2.33 per share, at the same time last year.

“Safeway Inc.’s second-quarter profit slipped 11 percent because of an unusual twist on its income taxes, but the second largest U.S. grocer remained on a sales upswing that has been propelled by a makeover of its stores.

The results released Thursday were overshadowed by concerns that rising food and dairy prices might squeeze Safeway’s profit margins for the rest of the year. Those worries contributed to decrease of more than 2 percent in Safeway’s stock price.

The Pleasanton-based company earned $218.2 million, or 49 cents per share, during the three months ended June 16. That compared with net income of $246.2 million, or 55 cents per share, at the same time last year.

“Advanced Micro Devices Inc. reported a loss in the second quarter as heavy acquisition costs and lower microprocessor prices overshadowed rising chip sales.

AMD, the world’s No. 2 microprocessor maker, said Thursday that it lost $600 million or $1.09 per share, for the three months ended June 30. That compares with a profit of $89 million, or 18 cents per share, in the same period last year.

The Sunnyvale-based chipmaker incurred one-time charges of $130 million, or $0.24 per share, during the latest quarter related to its $5.6 billion acquisition of graphics chip maker ATI Technologies Inc. Excluding those charges, AMD would have lost 85 cents per share.

“Union Pacific Corp. said Thursday its second-quarter profit rose 14 percent, led by higher commodity revenue and price increases for all classes of freight carried by the nation’s biggest railroad.

The Omaha-based company said it earned $446 million, or $1.65 per share, during the quarter that ended June 30, up from $390 million, or $1.44 per share, a year ago.

The latest earnings results exceeded forecasts by the company and analysts. The railroad said in April that it expected quarterly profits to be $1.44 per share. Analysts polled by Thomson Financial forecast a profit of $1.62 per share.

“Motorola Inc. reported a second straight loss Thursday after another quarter of subpar sales, a $28 million deficit that raises pressure on the handset maker and CEO Ed Zander in what he acknowledged has been “a very difficult year.”

The net loss amounted to a penny per share, down from a profit of $1.38 billion, or 55 cents per share, in the same period a year ago. Net loss from continuing operations totaled $38 million, or 2 cents per share, and included charges of 4 cents per share from job cuts and insurance litigation.