UPS profit drops amid cutbacks in shipping
ATLANTA --- Consumers are sending fewer, lighter packages, businesses are urgently trying to spend less on shipping orders, and it all spells bad news for UPS Inc.
The economic bellwether said Thursday its second-quarter profit plunged 49 percent and cautioned that its near-term outlook probably won't improve.
The story from smaller rival FedEx Corp. last month was even worse, as it faced some of the same challenges as UPS, but also accounted for hefty one-time charges and reported a sizable loss in its most recent quarter.
Both companies are tied to the well-being of the economy because they deal with such basic indicators of company health as orders and product shipments.
If demand doesn't improve, that could mean more job cuts at UPS, which as of the end of the second quarter had shed 15,000 jobs, mostly through attrition, compared to the same time last year. The company has about 410,000 employees.
For the three months ended June 30, UPS reported a profit of $445 million, or 44 cents a share, on revenue of $10.83 billion, compared to a year-ago profit of $873 million, or 85 cents a share, on revenue of $13 billion.
Microsoft's profit falls as sales remain weak
SEATTLE --- Microsoft Corp. said Thursday that its profit in the second quarter plunged 29 percent because of weak computer sales, ending a fiscal year in which the software maker's revenue fell for the first time since the company went public in 1986.
Microsoft's revenue in the quarter was well short of analysts' expectations, and its shares skated down $2, or 7.8 percent, to $23.56 in after-hours trading. Before the earnings report the stock had gained 3.1 percent to close at $25.56.
The results reflect how Microsoft's fortunes are tied to the PC industry, which is expected to sell fewer computers this year than last - the first such decline since 2001. Many buyers are holding on to their existing machines for longer than usual to save money in the recession.
Microsoft's earnings in the second quarter, which ended June 30, sank to $3.05 billion, or 34 cents per share. In the same period last year it earned $4.3 billion, 46 cents per share.
Because some people buying Windows Vista computers now will get free upgrades to Windows 7 in October, Microsoft deferred $276 million of Windows revenue.
Raytheon's earnings rise; outlook improves
WASHINGTON --- Defense contractor Raytheon Co. said Thursday its second-quarter earnings rose 15 percent on higher profits from radar systems, satellite equipment, information technology and Army training programs. The company also raised its outlook for the year.
Raytheon said it earned $489 million, or $1.23 per share, in the April-June quarter, up from $426 million, or 99 cents per share, in the same quarter last year.
Sales rose 4 percent to $6.13 billion from $5.87 billion a year ago.
The results beat the profit predictions of analysts polled by Thomson Reuters, who expected $1.13 per share. But Raytheon's sales came in shy of the $6.18 billion consensus prediction.
Raytheon also raised its outlook for 2009 by a nickel to a range of $4.60 to $4.75 per share.
AT&T Inc.'s earnings fell 15 percent in the second quarter as it subsidized a record-setting launch of the newest iPhone. The weak economy also continued to sap its landline business. The profit beat Wall Street estimates, however, and investors sent AT&T's shares up. The country's largest telecommunications provider said Thursday that it earned $3.20 billion, or 54 cents per share, in the April to June period. That was down from $3.77 billion, or 63 cents per share, a year earlier.
Northrop Grumman Corp.'s second quarter profit dropped by 20 percent as the No. 2 defense contractor said it was hurt by higher pension costs and higher estimates of costs to complete several ships being built in its Gulf Coast yards. The company, which makes military aircraft and defense electronics, said Thursday that it earned $394 million, or $1.21 per share, in the three months ended June 30, down from $495 million, or $1.44 per share, a year ago.
McDonald's Corp. said Thursday that even though more consumers chowed down on its burgers in the second quarter, the stronger dollar and a year-ago gain led profit to dip 8 percent. The Oak Brook, Ill.-based fast-food chain said net income fell to $1.09 billion, or 98 cents per share, from $1.19 billion, or $1.04 per share in last year's quarter.
Netflix Inc.'s second-quarter profit shot past analyst expectations as recession-weary consumers flocked to its DVD-by-mail and Internet streaming service. Netflix earned $32.4 million, or 54 cents per share, up 22 percent from a profit of $26.6 million, or 42 cents per share, at the same time last year.
3M Co. said Thursday that its second-quarter profit fell 17 percent as the global recession cut sales to car makers, but results still beat analyst estimates. The company said net income for the three months ended in June slipped to $783 million, or $1.12 per share, from $945 million, or $1.33 per share, in the same period a year earlier.